Gold falls as market awaits breakout

Slips Rs3,600/tola over US rate outlook; rupee inches up

KARACHI:

Gold prices in Pakistan fell Rs3,600 per tola to Rs435,436 on Tuesday, while 10-gram gold dropped Rs3,086 to Rs373,316, according to the All-Pakistan Gems and Jewellers Sarafa Association, as international bullion remained range bound amid uncertainty over the US rate outlook.

Silver prices remained unchanged at Rs6,234 per tola. In the international market, spot gold was largely steady at $4,138.54 per ounce by 1519 GMT, while US gold futures for December delivery declined 0.1% to $4,157.90 per ounce. Investors remained cautious ahead of next week's Federal Reserve meeting and the release of personal consumption expenditures (PCE) inflation data, which could provide fresh direction about monetary policy. "Inflation and the Fed rates are the big stories that gold is fighting at the moment," said Bob Haberkorn, Senior Market Strategist at StoneX.

Adnan Agar, Director at Interactive Commodities, said international gold had touched the intra-day high of $4,155 per ounce and low of $4,111. Later, it was trading around $4,127. He said the market was moving within a tight range, with resistance on the upside and support limiting the advance and decline, making a breakout likely over the coming days.

According to Agar, gold's broader trading range was from $4,060 to $4,220 per ounce. A sustained decline below $4,000 could push prices towards $3,700-$3,800, while a breakout above the $4,250-$4,280 zone could open the way towards $4,400 and potentially $4,600. He said the market's next move would depend on whether inflation data and Federal Reserve signals strengthened demand for gold or made interest-bearing assets more attractive. Meanwhile, the Pakistani rupee closed at 276.87 against the US dollar, gaining Rs0.03 from Monday's close at 276.90.