Gold up as international market hits two-week high
Jumps Rs4,600/tola amid global rally on soft dollar, ME tensions; rupee edges up to 277.91/$
Gold prices in Pakistan increased on Wednesday, tracking gains in the international market, where bullion rose to its highest level in two weeks due to a softer US dollar, technical buying and lingering Middle East tensions.
In the local market, the price of gold per tola reached Rs433,836 after a surge of Rs4,600, according to rates shared by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the 10-gram gold was sold at Rs371,944 after an increase of Rs3,944. The price of silver edged higher by Rs7 to Rs6,403 per tola.
Internationally, spot gold gained 1.3% to $4,130.59 per ounce by 08:32 am EDT, having touched its highest level since July 7 at $4,141.59 earlier in the session, as per Reuters. US gold futures for August delivery rose 1.5% to $4,135.40.
Market analyst Adnan Agar of Interactive Commodities noted that gold was trading around $4,156, with the intra-day high of $4,170 and low of $4,080. “The market provided a very strong support around $3,950 and $4,000. Now it’s heading upwards,” Agar said. He added that a close above roughly $4,250-4,300 would help gold exit the danger zone.
Agar observed that both gold and oil were rising together. “If oil goes out of control to $95, $98, or $99, then gold will remain under some pressure. But for now, after finding support, it has gone up nicely,” he said, urging caution in the coming days.
The rally comes as markets weighed signs of tensions in the Middle East despite US Secretary of State Marco Rubio stating that Washington was still looking to negotiate with Iran. Oil prices hovered near a six-week high, while investors awaited the Federal Reserve’s rate decision next week.
Gold miners are expected to report sharply higher second-quarter profits, buoyed by strong bullion prices. Newmont and Barrick Mining are projected to post combined profits of nearly $3.5 billion, up from $2.4 billion a year earlier, according to LSEG data. However, higher energy costs linked to the ME conflict may have weighed on earnings growth.
In corporate news, Canada’s NovaGold Resources said it would acquire the remaining shares in Donlin Gold from Paulson Advisers in an all-stock deal, creating a gold producer worth $4.2 billion. Shares of NovaGold rose 7.3%. Meanwhile, the Pakistani rupee closed at 277.91 against the US dollar, gaining Rs0.01 from Tuesday’s close at 277.92.
