Gold prices in Pakistan rose sharply on Monday, tracking gains in the international market, where the yellow metal surged over 2% to hit a two-week high as weak US economic data bolstered expectations of an imminent interest rate cut by the Federal Reserve.

According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola jumped Rs7,400 to reach Rs429,862, while the rate for 10 grams increased Rs6,337, settling at Rs368,530. On Saturday, the precious metal had closed at Rs422,462 per tola after a modest decline of Rs600. In the international market, spot gold climbed to as high as $4,105 per ounce before easing slightly to $4,090, marking a notable recovery from the previous session's low of $4,002.

Commenting on the trend, Adnan Agar, Director at Interactive Commodities, said, "Gold has come up today (Monday) – it hit a high of $4,105 and was later standing at $4,090. The market has risen about $80 to $90. If it crosses the next resistance around $4,155-4,150, it could continue its upward momentum; otherwise, a correction towards $4,080-4,050 is possible."

Analysts said investor demand for gold remains strong amid expectations of lower US interest rates, which typically weaken the dollar and boost appeal for non-yielding assets like gold.

Spot gold climbed 2.3% to $4,090.96 per ounce as of 11:43 am ET (1643 GMT) after hitting its highest level since October 27 earlier in the session, according to Reuters. US gold futures for December delivery rose 2.2% to $4,099.20 per ounce.

"Some weak data last week has the market tilting a little more dovish in their Fed expectations. ... We could very much still see a December rate cut," said Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals.

Data last week showed the US economy shed jobs in October, with losses in the government and retail sectors. Additionally, US consumer sentiment slumped in early November as households worried about the economic fallout, data on Friday showed.

Markets now see a 67% chance of a rate cut in December, with odds climbing to about 80% by January, according to CME Group's FedWatch tool. Meanwhile, the Pakistani rupee recorded a slight appreciation against the US dollar in the inter-bank market on Monday. By the end of trading, the local currency stood at 280.81, gaining Rs0.01 against the greenback.

In the previous week, the rupee had also shown a mild improvement, rising Rs0.09, or 0.03%, to close at 280.82 compared to 280.91 in the preceding week, according to data from the State Bank of Pakistan.