Gold up Rs1,200, global market flat

Gold prices in Pakistan increased on Monday despite little movement in the international market, as local prices reflected a lagged impact of previous global movements. The price of gold per tola rose Rs1,200 to Rs437,536, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association. The price of 10-gram gold increased by Rs1,029 to Rs375,116. On Saturday, gold had fallen by Rs4,300 per tola. The local market's strength came as international gold prices remained broadly steady, with pressure from a stronger US dollar and elevated Treasury yields offset by reduced expectations of a Federal Reserve rate hike this month. Spot gold edged 0.1% lower to $4,137.79 per ounce by 11:41 am EDT (1541 GMT), while US gold futures for December delivery gained 0.1% to $4,166, as per Reuters. The US dollar index strengthened, making dollar-denominated gold more expensive for buyers holding other currencies. At the same time, the yield on 10-year US Treasury bonds remained near two-decade highs, limiting the appeal of non-yielding bullion. However, expectations of further US monetary tightening have weakened after recent economic data largely disappointed market forecasts. Traders currently see a 22% probability of a Federal Reserve rate hike in October, while the probability rises to 84% for December, according to market expectations. Market participants are now awaiting the release of the September Federal Open Market Committee minutes on Wednesday, which could provide further clues about the central bank's rate outlook. Forex.com market analyst Fawad Razaqzada said gold could face a near-term decline before buyers return more strongly, citing the combination of a rising dollar and elevated bond yields. He said recent US economic data had largely fallen short of expectations, resulting in a reduction in bets on higher rates. Lower rates generally support gold by reducing the opportunity cost of holding the non-yielding asset, while higher rates and bond yields tend to weigh on bullion. Meanwhile, longer-term expectations remain bullish. Metals Focus expects gold to reach new all-time highs in 2027, suggesting that the current consolidation may precede another period of gains. Silver also strengthened in Pakistan on Monday. The price of silver rose Rs66 per tola to Rs6,588, marking a new all-time high. The divergent moves in gold and silver came as investors continued to assess currency movements, US monetary policy expectations and the outlook for precious metals. Meanwhile, the Pakistani rupee closed at 277.06 against the US dollar, gaining Rs0.01 in the inter-bank market.