Gold prices climbed to their highest point in more than three months as investors reacted to signs of growing inflation and instability in US bond markets. In Pakistan, the price of 24-carat gold per tola rose by Rs4,200 to Rs487,136, according to the All-Pakistan Gems and Jewellers Sarafa Association. Ten-gram gold also saw an increase, reaching Rs417,640, up from the previous day’s quote of Rs414,039. The upward movement in gold prices followed a sharp rise on Saturday, when the per-tola rate climbed by Rs5,700. International gold futures reached $4,730.40 an ounce, marking their highest level since May 14.
The rally was fueled by technical buying after the US Treasury announced plans to double the size of liquidity-support buyback operations for longer-dated notes and bonds, according to profit.pakistantoday.com.pk. Traders are also preparing for upcoming economic data, including the US PCE figures due on Wednesday, according to a report from tribune.com.pk. The attention is also focused on the speech by Fed Chair Kevin Warsh at the annual Jackson Hole conference this week. A press conference by the US Treasury secretary regarding Iran was scheduled for 1700 GMT on Monday.
Adnan Agar, director at Interactive Commodities, said gold had gained momentum in recent days. He noted that the market had moved from a low of $4,600 to a high of $4,680 before settling around $4,660. Agar attributed the strength in gold prices to concerns over US Treasury yields and predicted that the metal could move toward $4,800 per ounce.
The dollar also remained under pressure, hovering near multi-month lows after the Treasury’s announcement.
IMAGE: Kevin Warsh, member of the Board of Governors of the Federal Reserve.. Photo: Federal Reserve / Wikimedia, taken 2006-00-00, Public domain