Gold falls, rupee rises amid global conditions

Gold prices fell in Pakistan on Tuesday, tracking a decline in international markets, where the metal slipped more than 1 percent as investors took profits after hitting a six-week high in the previous session.

In global trade, spot gold was down 1.4 percent at $4,173.91 an ounce by 11:09 a.m. ET (1609 GMT), with markets awaiting key U.S. economic data ahead of the Federal Reserve’s policy meeting next week, according to Reuters.

Mirroring the global trend, domestic prices also fell. Gold price per tola fell by Rs 2,700 to Rs 444,162. The price of 10 gram gold fell by Rs 2,315 to Rs 380,797, the Sarafa Gems and Jewelery Association of Pakistan said.

On Monday, the price per tola had risen to Rs 446,862 after gaining Rs 2,700 during the day. Silver prices also declined, shedding Rs 41 to Rs 6,004 per tola.

Adnan Agar, Director of Interactive Commodities, said the market is undergoing a modest correction. He noted that gold hit a high of $4,230 and a low of $4,163 during the session and later traded around $4,191. According to him, upcoming US data releases, including several key economic statistics due this week and next, will guide price direction.

Agar added that gold has “strong bearish support around $4,140 and $4,100 and unless these levels are breached, the market is likely to remain biased to the upside.”

Analysts say readings on US jobs and inflation will be critical in shaping expectations about the Fed’s next policy move and in turn the near-term trajectory of gold.

Meanwhile, the Pakistani rupee edged higher against the US dollar, gaining 0.01% in the interbank market. The local currency closed at 280.47, up by Rs 0.04 from Monday’s rate of 280.51.

Globally, the US dollar remained under pressure after weaker-than-expected manufacturing data fueled speculation that the Federal Reserve may cut interest rates later this month. The U.S. dollar index, which tracks the greenback against six major currencies, fell to 99.408 in early Asian trade, extending a seven-session slide that hit a two-week low during Monday’s U.S. session.

Data released on Monday showed that US manufacturing contracted for a ninth straight month, with the Institute for Supply Management (ISM) manufacturing PMI falling to 48.2 in November from 48.7 in October. Measures of new orders and employment also weakened, while input costs rose, reflecting continued pressure from import tariffs.

Fed futures now point to an 88% chance of a 25 basis point rate cut at the Dec. 10 Fed meeting, up from a 63% chance a month ago, according to CME Group’s FedWatch tool.

Oil prices, another factor weighing on the dollar, were steady on Tuesday as traders weighed potential risks from Ukrainian drone attacks on Russian energy infrastructure and escalating tensions between the US and Venezuela.