Gold prices in Pakistan bounced back sharply on Thursday, tracking a strong rise in international markets as investors reacted to weaker than expected US jobs data and growing hopes that inflation pressures may ease.
The price of gold rose by Rs9,100 per tola to reach Rs428,736 in the local market, according to rates issued by the All Pakistan Gems and Jewellers Sarafa Association (APGJSA).
The price of 10 grams of gold also moved higher, climbing Rs7,802 to Rs367,572.
The increase came just a day after gold had fallen by Rs5,200 per tola to close at Rs419,636 on Wednesday.
In the global market, gold gained $91 to settle at $4,063 per ounce, including a premium of $20, providing fresh support to domestic prices.
Silver also posted a strong gain in Pakistan, with its price rising by Rs203 to Rs6,445 per tola.
Internationally, spot gold was up 0.9 percent at $4,067.67 per ounce by 0753 GMT after touching its highest level since June 23 during the previous session. US gold futures for August delivery were little changed at $4,080 per ounce.
The precious metal recovered after data showed that US private employers added 98,000 jobs in June, missing economists’ expectations of 118,000. The softer labour market figures raised expectations that the US Federal Reserve could have more room to lower interest rates later this year.
Nicholas Frappell, global head of institutional markets at ABC Refinery, said investors had become cautious about betting against gold because recent declines had been quickly reversed.
He said the weaker than expected ADP employment figures likely supported the latest rally as markets looked ahead to the closely watched US nonfarm payrolls report.
Investors are now waiting for the official US jobs data, due later on Thursday, for fresh signals on the Federal Reserve’s next policy move.
Market participants are currently pricing in about a 66 percent chance of a US interest rate cut in September.
Gold also found support after oil prices declined following another round of indirect talks between the United States and Iran. Lower oil prices can reduce inflation concerns, which often improves sentiment in financial markets.
Other precious metals also traded higher. Spot silver gained 0.6 percent to $59.47 per ounce, platinum advanced 2.2 percent to $1,611.60, while palladium rose 1 percent to $1,221.54.
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