On Tuesday, gold prices rose further to reach a one-week peak achieved last week, supported by a weaker Pakistani rupee. Investors were keeping an eye on upcoming economic developments that could impact the market’s direction. The All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) reported that the price of gold (24 carats) rose by Rs500 per tola and Rs429 per 10 grammes to settle at Rs197,000 and Rs168,896, respectively.

The decline of the Pakistani rupee against the US dollar in the interbank market by 0.24 per cent to Rs262.51 boosted the appeal of the precious metal. However, the outlook for gold remained uncertain as the prospects of the rupee’s recovery against the dollar increased, driven by optimism surrounding the revival of the International Monetary Fund (IMF) programme.

The yellow metal gained Rs3,800 per tola over the last three sessions. Silver prices in the domestic market also increased by Rs20 per tola and Rs17.14 per 10 grams to settle at Rs2,150 per tola and Rs1,843.27 per 10 grammes, respectively.

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Meanwhile, in the international market, gold prices dropped by $12 per ounce to settle at $1,832 due to the rise of the dollar, while investors awaited US economic data to determine the Federal Reserve’s interest rate strategy. The dollar index remained high, making dollar-priced gold more expensive for buyers with other currencies.

Han Tan, chief market analyst at Exinity, said that gold’s primary driver remains the changing expectations surrounding the Fed’s policy moves, and the upcoming release of the FOMC minutes could provide more clues. If the US economy continues to defy the Fed’s rate hikes, it could lead to a higher peak for US rates, which would disappoint bullion bulls.

The market focus this week is on the release of the Federal Open Market Committee’s January meeting minutes on Wednesday, followed by US gross domestic product data on Thursday and Friday’s core PCE price index. Although gold prices reached their highest level since April 2022 earlier this month at $1,959.60, they have dropped by approximately $130 after US data indicated a robust economy.