Gold prices in Pakistan fell on Wednesday, tracking losses in the international market, as investors booked profits after the precious metal scaled the $3,700-per-ounce mark in the previous session. Attention then turned to the US Federal Reserve's policy verdict, which was expected later in the day.
According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold per tola declined by Rs2,400 to settle at Rs388,600. Similarly, the rate for 10 grams of gold dropped by Rs2,058 to Rs333,161. A day earlier, domestic prices had held steady at Rs388,100 after touching a record high.
Internationally, spot gold was down 0.1% at $3,685.39 per ounce, as of 10:49 am EDT (1449 GMT), after hitting a record high of $3,702.95 on Tuesday, according to Reuters.
Silver prices also followed the downward trend in Pakistan, with the per-tola rate decreasing by Rs109 to Rs4,387, APSGJA said.
Interactive Commodities Director Adnan Agar said the market was closely watching the Federal Reserve's decision and tone. "If the Fed cuts rates by 25 basis points with a dovish statement, gold could rise again. But if the outlook remains hawkish and data-dependent, prices may fall," he noted.
Agar cautioned that gold remains heavily overbought after doubling in price over the past two years, rising from $1,800 to $3,700 per ounce without any major correction. "A healthy adjustment towards $3,500-$3,550 is possible before any sustainable rally. Otherwise, the market risks a sharp correction of $300-400," he added.
Analysts say the outcome of Fed's meeting will set the short-term trajectory for gold, which has surged on global uncertainties but now faces pressure for a technical correction.
Meanwhile, the Pakistani rupee extended its upward streak against the US dollar in the inter-bank market, posting a slight appreciation. By the day's close, the local currency stood at 281.50 per dollar, inching up one paisa compared to the previous session. This marked the rupee's 29th consecutive session of gains. On Tuesday, the currency had ended at 281.51.
The State Bank of Pakistan (SBP) raised a total of Rs195 billion through the auction of short-term government securities but rejected all bids for a longer-term floating-rate bond, reflecting a selective approach to debt management.
The auction for Market Treasury Bills (MTBs) saw strong demand, with the bank accepting Rs201.87 billion in face value out of a total bid amount of over Rs1.07 trillion. In stark contrast, all bids for the 10-year Pakistan Investment Bond — Floating Rate (PFL), which totalled over Rs502 billion, were declined.
The accepted MTB bids carried high yields as cut-off rates ranged from 10.7445% for one-month bill to 10.9999% for 12-month papers, signalling persistent inflationary pressures and a tight monetary policy stance. The complete rejection of all bids for the longer-duration PFL underscores a significant disconnect between investor yield expectations and the central bank's pricing strategy for long-term debt. This outcome highlights a prevailing investor preference for short-term securities amid ongoing macroeconomic uncertainty.
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