Gold stays firm at Rs437,536 despite global uptick

Gold prices in Pakistan remained unchanged on Tuesday, while the precious metal gained in the international market, as a pause in the rise in US Treasury yields and a weaker dollar supported demand.

The price of gold remained at Rs437,536 per tola in the local market, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10-gram gold stood unchanged at Rs375,116. On Monday, gold had risen by Rs1,200 per tola.

The price of silver also remained unchanged at Rs6,588 per tola on Tuesday. In the international market, spot gold rose 0.6% to $4,163.16 per ounce by 12:22 pm EDT (1622 GMT), while US gold futures for December delivery gained 0.8% to $4,191, according to Reuters.

The gains came as the dollar weakened and the recent rally in US Treasury yields paused, making dollar-denominated gold relatively more attractive. Investors were also awaiting the minutes of the US Federal Reserve's September meeting, due on Wednesday, for further clues about the central bank's monetary policy outlook.

However, the near-term technical outlook for gold remains under pressure, according to Adnan Agar, Director at Interactive Commodities. Agar said gold was trading around $4,165 an ounce, after touching the high of $4,175 and the low of $4,103. He said the international market had largely remained within a range of around $4,100 to $4,220 over the past week.

"There is more pressure on the lower side," Agar said, adding that gold could face further declines unless it breaks above the $4,280 level. If gold fails to cross that level, he sees the possibility of the metal falling towards $4,050-$4,000 an ounce.

A break below $4,000 could open the way towards $3,700, although Agar said the market would first need to test the $4,000 level before assessing the next move. He said a further $4-5 rise in oil prices, combined with a sustained increase in US bond yields, could add pressure on gold.

Meanwhile, TD Securities expects gold to rise above $5,000 per ounce next year, highlighting the continued bullish longer-term outlook despite short-term downside risks.

Meanwhile, the Pakistani rupee closed at 277.05 against the US dollar on Tuesday, gaining Rs0.01 in the inter-bank market. On Monday, the local currency settled at 277.06 against the greenback. Internationally, the US dollar extended its strong rally, supported by elevated US Treasury yields.