Gold flat as international prices slip

Global market moves lower ahead of Fed decision; rupee inches up

KARACHI:

Gold prices remained unchanged in Pakistan on Monday, as a stronger US dollar and rising Treasury yields pressured international bullion prices, while investors awaited the US Federal Reserve's policy decision next week.

In the local market, the price of gold stood at Rs439,036 per tola, unchanged from the previous session, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). Similarly, the price of 10-gram gold remained stable at Rs376,402. On Saturday, gold had declined by Rs1,600 per tola.

In the international market, spot gold fell 0.5% to $4,143.91 per ounce by 11:34 am EDT (1534 GMT), while US gold futures for December delivery declined 0.4% to $4,163.30 per ounce, as per Reuters. The US dollar edged higher, making dollar-denominated gold more expensive for holders of other currencies. Meanwhile, yields on 10-year US Treasury notes rose 0.6%, adding further pressure on the non-yielding metal. Adnan Agar, Director at Interactive Commodities, said international gold prices were trading near $4,144 per ounce, with the session's low at $4,140 and high at $4,195. He said the market remained confined to a range of approximately $4,070-$4,080 on the lower side and around $4,200 on the upper side.

According to Agar, the direction of the next significant move will depend on which side of this trading range prices break through. A sustained move beyond either boundary could provide a clearer signal for the market's next direction.

Investors are also monitoring developments in the oil market and upcoming US economic data. Oil prices slipped from a five-month high after US President Donald Trump granted a waiver related to sanctions on Russian oil. Market attention is turning to next week's Federal Reserve policy announcement and the release of personal consumption expenditures (PCE) data, a key measure of US inflation.

Traders see an 83% probability that the Fed will leave rates unchanged this month, reflecting expectations that policymakers will maintain their current stance. "There are concerns that central banks will have to tighten their policies further to control inflation, which is providing yields another boost. And with yields remaining elevated, gold investors are wondering whether it makes more sense to be in the bond market right now," said Fawad Razaqzada, market analyst at Forex.com.

Meanwhile, silver prices in Pakistan moved higher, contrary to no movement in gold, rising Rs59 per tola to reach Rs6,234. The Pakistani rupee gained Rs0.01 against the US dollar on Monday, closing at 276.90 in the inter-bank market, compared with the previous close of 276.91.