Gold prices recover ahead of Fed decision

Local bullion gains Rs1,400/tola; rupee inches up vs dollar

KARACHI:

Gold prices in Pakistan increased on Monday, gaining Rs1,400 per tola, as the precious metal rebounded in the international market from a more than three-month low amid easing oil prices and ahead of the US Federal Reserve's monetary policy decision.

In the local market, gold prices rose to Rs423,436 per tola, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association. The price of 10-gram gold increased by Rs1,201 to Rs363,028. On Saturday, gold had declined by Rs2,500 per tola to settle at Rs422,036.

In the international market, spot gold rose 0.6% to $4,018.81 per ounce by 1543 GMT on Monday, recovering after touching $3,975 on Friday, its lowest level since July 20, as per Reuters. US gold futures for December delivery gained 0.7% to $4,033.60 per ounce.

The recovery came as oil prices eased from near six-month highs, tempering concerns about inflation and providing some support to bullion. However, investors remained cautious ahead of key US economic developments this week.

The Federal Reserve's rate decision is due on Wednesday, while the US personal consumption expenditure (PCE) data, a key measure watched by the central bank, is scheduled for Thursday. Market participants are also assessing the outlook for the US monetary policy, with traders seeing an 82% probability of a Fed rate hike in December.

Adnan Agar, Director of Interactive Commodities, said gold was trading at $4,013 an ounce, after hitting the intra-day high of $4,029 and low of $3,977. He said the precious metal remained under downward pressure, with further declines possible. The US monetary policy announcement scheduled for Wednesday is expected to play a key role in determining the gold's future direction.

Meanwhile, domestic silver prices increased by Rs20 per tola to Rs5,878, according to the sarafa association. Furthermore, the rupee extended its upward trajectory, gaining Rs0.01 to close at 276.81 against the US dollar in the inter-bank market.