Gold down, rupee edges up amid global cues

Local currency closes at 280.47/$, up 4 paisa; yellow metal falls Rs2,700/tola

KARACHI:

Gold prices fell in Pakistan on Tuesday, tracking the decline in international markets, where the metal slipped more than 1% as investors took profits after a six-week high in the previous session.

In global trade, spot gold dropped 1.4% to $4,173.91 per ounce by 11:09 am ET (1609 GMT), with markets awaiting key US economic data ahead of Federal Reserve's policy meeting next week, according to Reuters.

Reflecting the global trend, domestic prices also retreated. Gold rate per tola fell by Rs2,700 to Rs444,162. The price of 10-gram gold decreased by Rs2,315 to Rs380,797, reported the All-Pakistan Gems and Jewellers Sarafa Association.

On Monday, the per-tola price had risen to Rs446,862 after gaining Rs2,700 during the day. Silver prices also weakened, shedding Rs41 to reach Rs6,004 per tola.

Adnan Agar, Director at Interactive Commodities, said the market was undergoing a moderate correction. He noted that gold hit a high of $4,230 and a low of $4,163 during the session, and was later trading around $4,191. According to him, upcoming US data releases, including several key economic statistics due this week and next, will guide price direction.

Agar added that gold has "strong downside support around $4,140 and $4,100, and unless these levels are breached, the market is likely to remain biased to the upside."

Analysts say US labour and inflation readings will be critical for shaping expectations about the Fed's next policy move, and in turn, gold's near-term trajectory.

Meanwhile, the Pakistani rupee edged higher against the US dollar, gaining 0.01% in the inter-bank market. The local currency closed at 280.47, up by Rs0.04 from Monday's rate of 280.51.

Globally, the US dollar remained under pressure after weaker-than-expected manufacturing data intensified speculation that the Federal Reserve may cut interest rates later this month. The US dollar index, which tracks the greenback against six major currencies, fell to 99.408 at the start of Asian trading, extending a seven-session decline that hit a two-week low during Monday's US session.

Data released on Monday showed US manufacturing contracted for the ninth consecutive month, with the Institute for Supply Management's (ISM) manufacturing PMI dropping to 48.2 in November from 48.7 in October. Measures of new orders and employment also weakened, while input costs rose, reflecting continued pressure from import tariffs.

Fed fund futures now indicate an 88% probability of a 25-basis-point rate cut at the Fed's December 10 meeting, up from a 63% chance a month ago, according to the CME Group's FedWatch tool.

Oil prices, another factor for the dollar's valuation, remained steady on Tuesday as traders assessed potential risks from Ukrainian drone attacks on Russian energy infrastructure and escalating tensions between the US and Venezuela.