Gold rises Rs1,700/tola despite global dip

International rates slip over ME uncertainty, US data watch; rupee gains three paisa

KARACHI:

Gold prices rose in the Pakistani market on Monday even as international rates edged lower, driven by lingering uncertainty over the Middle East conflict and concerns about rising inflation. Markets are also closely watching a series of US jobs reports this week for clues on the Federal Reserve's policy path.

In the local market, the per-tola gold reached Rs428,436 after gaining Rs1,700 during the day. Ten-gram gold was sold at Rs367,314, up Rs1,457, according to rates shared by the All-Pakistan Gems and Jewellers Sarafa Association. On Saturday, the price had fallen Rs3,700 to close at Rs426,736 per tola.

Internationally, spot gold fell 0.1% to $4,037.01 per ounce by 12:37 pm EDT (1637 GMT). US gold futures for August delivery dropped 0.3% to $4,035.80. Meanwhile, silver prices in the local market increased Rs54 to Rs6,291 per tola.

Adnan Agar, Director at Interactive Commodities, noted that gold prices had come down a bit in the international market. "Gold made a high of $4,080 and a low of $4,019, with the market later standing at $4,038," he said.

"Again, there is pressure on the market, especially on gold. We'll see what happens in the coming days. By the way, there is a lot of US data expected this week. Over the next one or two weeks, it looks like that this range of $4,250 to $3,950 – in which it has been stuck since roughly June – is about to break. If not this week, then at the very max, it will break next week. So, let's see what happens in the coming days."

Traders are focusing on the upcoming US employment data for signals on the Federal Reserve's rate outlook. Additional factors in the global gold market include reports that South Korea's central bank plans to buy gold from local producers.

Oil markets have also remained volatile, with Brent futures having jumped more than 20% last month amid geopolitical tensions.

"Gold has been stuck in a trading range for more than a month now, roughly between $4,000 and $4,200. Providing support is the fact that the market could be expecting a resurgence in inflation, especially in July, when fresh data will likely reverse much of June's decline," Marex analyst Edward Meir said.

Meanwhile, the Pakistani rupee continued its modest upward movement against the US dollar on Monday, appreciating by 0.01%. The local currency closed the trading day at Rs277.77, registering a gain of Rs0.03 over the previous close. On Friday, the rupee had settled at 277.80 against the greenback.