Gold drops despite rebound in global market

Gold prices in Pakistan fell on Tuesday even as the international market saw a rebound from a one-week low, supported by softer US employment data and expectations of a Federal Reserve rate cut in December.

According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola dropped by Rs7,000 to settle at Rs423,662. Similarly, the rate for 10-gram gold decreased by Rs6,002, closing at Rs363,221.

The decline comes a day after domestic bullion rates remained stable, with the per-tola price standing at Rs430,662.

In the international market, gold recovered after touching a one-week low, trading between $3,997 and $4,080. Adnan Agar, Director at Interactive Commodities, said global prices showed a mild correction following two days of upward movement.

"Gold has come down. The low for the day was $3,997 and the high was $4,080. Later, it was standing at $4,060," he said, noting that a "slight downward sentiment has emerged" after the recent rally.

He cautioned that if gold closed below $4,000, it could potentially revisit the $3,920-3,950 range. "Tomorrow (Wednesday) and the day after are two days with important data, which is critical for gold, so we'll have to see how the market reacts," he added.

Investors are awaiting further US economic indicators this week, which may influence expectations around the Fed's December policy decision and shape global bullion trends.

Spot gold was up 0.6% at $4,068.05 per ounce as of 12:01 am ET (1701 GMT), after hitting its lowest since November 10 earlier in the session, according to Reuters. US gold futures for December delivery fell 0.2% to $4,068.40 per ounce.

Data on Tuesday showed that the number of Americans receiving unemployment benefits stood at a two-month high in mid-October, with continued claims for jobless benefits rising to 1.9 million in the week ended October 18.

"(The data) is slightly boosting market hopes for a December rate cut. This is helping gold and silver, which are trying to break a three-day losing streak," said Tai Wong, an independent metals trader.

Meanwhile, the Pakistani rupee saw a slight uptick against the US dollar on Tuesday, appreciating by 0.01% in the inter-bank market. By the end of trading, the rupee closed at 280.67, reflecting a modest rise of Rs0.04. A day earlier, the currency had closed at 280.71.

In global markets, the Japanese yen weakened to its lowest level in over nine months during early Asian trade as the US dollar strengthened amid fading expectations of a Federal Reserve rate cut at next month's policy meeting.