Gold prices in Pakistan continued their sharp upward run on Monday as the precious metal crossed Rs487,000 per tola on a strong international rally that pushed bullion to its highest level in over three months.

Jewelers Sarafa Association 24-carat gold rose by Rs4,200 to Rs487,136 per tola. The price of 10 grams of gold went up by Rs3,601 to Rs417,640. Gold gained further on Sunday, adding Rs1,200 per tola, after it had already climbed Rs5,700 per tola on Saturday, showing the strength of the recent rally in the domestic market.

The move came after developments in international markets where spot gold jumped 1.5 percent to $4,673.20 an ounce by 1535 GMT, it’s highest since May 14, Reuters said. US gold futures for December delivery were also up 1.1% at $4,730.40 an ounce.

“Gold had developed a strong upward momentum, with prices going from $4,600 to $4,680 before settling near $4,660,” Interactive Commodities Director Adnan Agar said.

Agar tied the strength to worries about US Treasury yields and said gold appeared on track for $4,800. But he warned it may be hard to breach the level with a correction of $500 to $600 possible afterward.

The global rally was also supported by technical buying after the US Treasury’s recent buyback announcement and a weaker dollar, which made gold more attractive. Investors are also positioning for key US inflation data and the Jackson Hole Symposium later this week.

Markets will be looking at US PCE inflation data due on Wednesday and at the first speech by Federal Reserve Chair Kevin Warsh at the symposium. The key drivers for bullion in the coming days will likely continue to be the developments around US Treasury yields and economic policy more broadly.

The rupee showed little resistance to the global dollar trend in Pakistan, closing at 277.55 against the US currency in the inter-bank market, up by a marginal Rs0.01.

Gold’s upward momentum remains intact with the dollar hovering near multi-month lows and global investors looking closely for signals on US monetary policy. But for Pakistani buyers, the latest international gains are already percolating down to much higher local prices, keeping the precious metal firmly in focus.

Credit: Independent News Pakistan (INP)