Gold prices in Pakistan fell on Friday, according to data compiled by companies FXStreet.
The price of 24-karat gold stood at PKR 18,238.20 per gram, down by PKR 21.15 from PKR 18,259.35 on Thursday.
The price of 24 carat gold decreased to PKR 212,726.83 per tola from PKR 212,973.49 per tola.
|The price of gold
FXStreet calculates gold prices in Pakistan by adjusting international prices (XAU/USD) to local currency and units of measurement. Prices are updated daily based on market rates in effect at the time of publication. Prices are indicative only and local rates may vary slightly.
Global market moves: Gold price lacks firm near-term direction, awaits cues on Fed rate cut path
- Robust US macro data and hawkish comments from Federal Reserve officials are prompting investors to hedge their bets on a sharp rate cut this year, continuing to act as a headwind to a sluggish gold price.
- Fed Chairman Jerome Powell said on Sunday that the central bank may be cautious in deciding when to start easing amid a strong economy, dashing any remaining hopes for a rate cut in March.
- In addition, Richmond Fed Thomas Barkin said Thursday that the central bank has time to be patient on rate changes and that it needs to maintain and extend good inflation numbers.
- This is helping the benchmark US 10-year Treasury yield hold above 4.0% and undermining XAU/USD, even as subdued US dollar price action provides support and helps limit downside.
- Market participants are now looking to US consumer inflation numbers due next week to signal the timing and pace of rate cuts this year, which should in turn provide new directional impetus for the metal.
- The commodity, meanwhile, remains on track to record modest weekly losses, although it remains confined to a several-week-old trading range held since the start of this year, prompting caution for aggressive traders.
(An automation tool was used to create this post.)
Frequently Asked Questions About Gold
Gold has played a key role in human history as it has been widely used as a store of value and a medium of exchange. Nowadays, the precious metal, apart from its luster and use for jewelry, is widely seen as a safe haven, meaning it is considered a good investment in turbulent times. Gold is also widely seen as a hedge against inflation and currency depreciation because it does not rely on any particular issuer or government.
Central banks are the largest holders of gold. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perceived strength of the economy and currency. High gold reserves can be a source of confidence for a country’s solvency. Central banks added 1,136 tons of gold to their reserves in 2022, worth about $70 billion, according to data from the World Gold Council. This is the highest annual purchase since records began. Central banks from emerging economies such as China, India and Turkey are rapidly increasing their gold reserves.
Gold has an inverse correlation with the US dollar and US Treasuries, which are major reserves and safe-haven assets. When the dollar weakens, gold tends to rise, allowing investors and central banks to diversify their assets during turbulent times. Gold is also inversely correlated with risk assets. Stock market rallies tend to weaken the price of gold, while sell-offs in riskier markets tend to favor the precious metal.
The price can fluctuate due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly escalate the price of gold due to its safe-haven status. As a lower-yielding asset, gold tends to rise with lower interest rates, while the higher cost of money typically weighs on the yellow metal. Still, most moves depend on how the US dollar (USD) behaves when the asset is priced in dollars (XAU/USD). A strong dollar tends to keep the price of gold in check, while a weaker dollar is likely to push gold prices up.