Gold price under pressure as markets shift to riskier assets

WEB DESK: Gold prices steadied on Monday as a stronger US dollar and cooling trade tensions between Washington and Beijing kept investors cautious, reducing the metal’s appeal as a safe haven.

Spot gold slipped slightly by 0.1 percent to $3,997.94 per ounce at 0250 GMT, while US gold futures for December delivery edged up 0.3 percent to $4,008.60 per ounce. The yellow metal has fallen nearly 10 percent since touching an all-time high of $4,381.21 on October 20, weighed down by the dollar’s rebound to a near three-month peak.

Fed tone keeps traders cautious

The Federal Reserve’s recent 25-basis-point rate cut on October 29 initially boosted gold, but the enthusiasm faded after Fed Chair Jerome Powell signalled a more hawkish stance, suggesting that further cuts might not come as quickly as markets hoped.

According to CME’s FedWatch Tool, traders now see a 71 percent chance of another rate reduction in December, down from over 90 percent before Powell’s remarks.

“Gold’s momentum has slowed because the dollar remains firm, and technical factors are limiting upside moves,” said Kelvin Wong, a senior market analyst at OANDA. “Some investors are also shifting towards riskier assets as trade tensions ease.”

Non-yielding gold typically benefits from lower interest rates and periods of uncertainty. However, with signs of progress in US-China relations, the metal’s safe-haven demand appears to have waned for now.

Elsewhere in precious metals, spot silver rose 0.3 percent to $48.77 per ounce, platinum gained 1 percent to $1,583.28, and palladium increased 0.4 percent to $1,439.21.

Gold price in Pakistan

In Pakistan, gold prices mirrored the international downturn over the weekend. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold dropped by Rs1,600 on Saturday, bringing the rate to Rs422,562 per tola. Ten-gram gold was sold at Rs362,278 after a fall of Rs1,372.

A day earlier, the price had jumped by Rs5,300 per tola to Rs424,162, tracking global fluctuations. The international rate, with a $20 premium, stood at $4,002 per ounce, down by $16 during the session.

Silver also followed suit, shedding Rs65 per tola to settle at Rs5,127.

Traders say the local market is likely to remain sensitive to shifts in the international price, as well as movements in the rupee and the dollar’s global strength.