Gold prices rose in Pakistan on Thursday, according to data compiled by FXStreet.
The price for 24-carat Gold stood at 18,235.22 Pakistani Rupees (PKR) per gram, up PKR 20.78 compared with the PKR 18,214.43 it cost on Wednesday.
The price for 24-carat Gold increased to PKR 212,691.98 per tola from PKR 212,449.58 per tola.
|Gold Price in PKR
FXStreet calculates Gold prices in Pakistan by adapting international prices (XAU/USD) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Global Market Movers: Gold price struggles to attract any meaningful buying amid hawkish Fed expectations
- The nervousness ahead of the crucial US inflation data tempers investors’ appetite for riskier assets and lends support to the safe-haven Gold price amid a modest US Dollar downtick.
- Several Federal Reserve officials reiterated on Wednesday that more work was needed to bring down inflation, which should allow the central bank to keep interest rates higher for longer.
- New York Fed President John Williams said that the US central bank will begin cutting interest rates in 2024, albeit in the latter half of the year as the path to the 2% inflation target is uneven.
- Atlanta Fed President Raphael Bostic said that he is comfortable advising patience when it comes to loosening policy and that the central bank has not declared victory over inflation yet.
- Separately, Boston Fed Bank President Susan Collins said that the central bank will likely cut rates this year, though should be taking time to assess data before making any change to the policy.
- The second estimate of the US GDP growth released on Wednesday showed that the US economy expanded by a 3.2% annualized pace in Q4, slightly less than the 3.3% rise reported originally.
- The data, meanwhile, reinforced the view that the US economy remains in good shape and hawkish Fed expectations, though does little to provide any meaningful impetus to the US Dollar.
- Nevertheless, the Fed’s hawkish outlook on interest rates might cap any further appreciating move for the non-yielding metal ahead of the US Personal Consumption Expenditures (PCE) Price Index.
- Thursday’s US economic docket also features the release of Weekly Initial Jobless Claims, the Chicago PMI and Pending Home Sales, which, along with Fed speak, could provide some impetus.
(An automation tool was used in creating this post.)
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. 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 the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.