Gold prices in Pakistan saw an increase on Monday, with the price for 24-carat Gold rising to 18,205.26 Pakistani Rupees (PKR) per gram, up PKR 13.52 compared with Friday. Additionally, the price for 24-carat Gold went up to PKR 212,342.61 per tola from PKR 212,184.93 per tola. This rise in gold prices reflects the global market trends as investors and traders await clarity about the Fed’s rate cut path before placing directional bets.
Global Market Movers:
1. There is a growing acceptance that the Federal Reserve will keep interest rates higher for longer, which acts as a headwind for the non-yielding Gold price.
2. Recent hawkish remarks by influential FOMC members have led to a scaling back of expectations for early and steep interest rate cuts this year.
3. The uncertainty about the likely timing and pace of interest rate cuts by the Fed is causing the US Dollar to struggle to gain meaningful traction.
4. Traders are waiting on the latest US consumer inflation figures for cues about the Fed’s rate-cut path before making directional bets.
5. Relatively thin trading volumes are seen due to holidays in Japan and China, contributing to the subdued range-bound price action on the first day of the week.
Insight: It’s important to note that gold has played a crucial role in human history, serving as a store of value, medium of exchange, and a safe-haven asset during turbulent times. The precious metal is also viewed as a hedge against inflation and depreciating currencies. Furthermore, central banks are the largest holders of gold, often using it to support their currencies and improve the perceived strength of the economy. Geopolitical instability, fears of a deep recession, and fluctuations in the US Dollar can all impact the price of gold, making it a versatile asset to watch.
