Gold stuck near recent highs amid Fed uncertainty

WASHINGTON: Gold prices remained unchanged on Thursday as traders chose to wait for fresh economic signals from the United States before making any major moves.

Spot gold was steady at $3,390.27 (PKR 1,289,607) per ounce (about 2.27 tola) by 0257 GMT, holding near its strongest level since August 11, touched earlier in the session. US gold futures for December delivery also showed little movement, trading flat at $3,447.40 (PKR 977,647).

Caution ahead of US inflation report

Market attention is now fixed on Friday’s release of the Personal Consumption Expenditures (PCE) Price Index, the US Federal Reserve’s preferred measure of inflation. Economists expect the July figure to show a 2.6 percent rise, the same pace as the previous month.

Kyle Rodda, a financial markets analyst at Capital.com, said interest in gold remains strong due to ongoing concerns about institutional risks and the independence of the Fed.

“We’re really looking for something to push the price above the critical $3,400 level. The PCE data will be very significant. We are still bullish on gold and the fundamentals seem to be moving in the right direction,” he noted.

Fed signals and investor bets

Traders are pricing in a high probability that the Fed will lower its key interest rate at its next meeting. According to the CME FedWatch Tool, markets see an 88 percent chance of a 25-basis-point cut in September.

New York Fed President John Williams also indicated on Wednesday that rates are likely to come down at some point. However, he cautioned that policymakers will decide after assessing upcoming data.

Gold, which does not offer interest, tends to perform better in a lower-rate environment as it becomes more attractive compared with yield-bearing assets.

Other precious metals

In other metals, spot silver gained 0.3 percent to $38.72 per ounce, platinum held steady at $1,348.07, and palladium added 0.3 percent to $1,095.26.

Gold price in Pakistan

Gold rates in Pakistan edged higher on Wednesday, extending their upward run in line with gains in the international market.

According to rates shared by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola rose by Rs1,000 to reach Rs361,700. Similarly, the price of 10 grammes stood at Rs310,099 after adding Rs857 during the day.

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