Gold climbs despite mixed global cues

Jumps Rs4,200/tola; rupee continues slight upward movement against dollar

KARACHI:

Gold prices rose in the domestic market on Wednesday even as international rates showed mixed movements, influenced by key US economic data.

According to rates shared by the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola reached Rs463,936 after gaining Rs4,200. Ten-gram gold was quoted at Rs397,750, up Rs3,601. On Tuesday, the per-tola price had closed at Rs459,736 after a gain of Rs2,400.

The increase came against a backdrop of cautious trading in the international market. Spot gold had edged lower on Tuesday, settling around $4,376 per ounce after earlier testing levels near a more than two-month high. Market participants had been awaiting the US consumer price index (CPI) report for clues on the Federal Reserve's policy direction.

Spot gold was down 0.3% at $4,376.31 per ounce at 1:50 pm EDT (1750 GMT), after hitting its highest level since June 5 at $4,434.84 earlier in the session in an attempt to break above the 100-day moving average, which is currently at $4,387.92.

Interactive Commodities Director Adnan Agar said gold was trading near $4,404 on Wednesday, with the intra-day high of $4,440 and the low of $4,362. He noted that the latest US inflation data came in neutral, matching the previous month's reading.

"This development favoured gold because expectations of a September rate hike, which had built up since June and July, have now largely faded," Agar said. He pointed to two factors: weaker US employment data last Friday and the stable CPI print, which reduced the likelihood of an immediate tightening move by the Fed. Agar added that the market was watching for sustained trading above the $4,400 level. "If that holds, gold could target the $4,600–$4,700 zone in the coming period." On the downside, he said, a pullback towards $4,250–$4,300 was possible if momentum faded.

Meanwhile, silver prices in the local market moved higher by Rs146 to Rs7,111 per tola. The Pakistani rupee continued its slight upward movement against the US dollar, ending the day at 277.66 after gaining one paisa. A day earlier, the local currency had closed at 277.67.

In the global market, the dollar traded largely unchanged in early Asian hours, brushing aside renewed attacks on shipping in critical Middle Eastern waterways, as traders awaited key inflation data due later in the day.