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Gold at Rs416,778 on futures frenzy | The Express Tribune
KARACHI:
Gold prices in Pakistan rose on Tuesday, tracking gains in the international market, where US gold futures broke past the unprecedented $4,000 per ounce level for the first time.
The surge was driven by expectations of an upcoming Federal Reserve rate cut and sustained safe-haven demand amid the ongoing US government shutdown.
In the local bullion market, the price of gold per tola increased by Rs1,500 to reach Rs416,778, according to data released by the All Pakistan Sarafa Gems and Jewellers Association. Similarly, the rate for 10 grams rose by Rs1,286 to Rs357,319. On Monday, the price had already jumped by Rs5,400 per tola to Rs415,278.
US gold futures for December delivery settled 0.7% higher at $4,004.4, after hitting the high of $4,014.6, as per Reuters. Spot gold was up 0.6% to $3,985.82 per ounce as of 01:48 pm EDT (1748 GMT), after hitting an all-time high of $3,990.85 earlier in the session.
Interactive Commodities Director Adnan Agar said the current rally in gold was primarily being driven by futures activity rather than spot prices. In the futures market, it broke the $4,000 level.
Agar noted that despite the record-breaking rally, the market appeared “overstretched” and may be due for a correction. “I’ve been watching gold for 15 years and have never seen it this overbought. The rally is too strong, even bullish trends have limits,” he said.
Agar added that profit-taking was likely once investors began to view current price levels as unsustainable. “If something doubles or triples in price, that’s understandable. But when it goes up six or seven times, investors start locking in profits. We may soon see a selling phase once a trigger appears.”
However, with the US government partially shut down and key economic data releases delayed, there are currently few catalysts for a sell-off. He suggested that a potential resolution of the political standoff between the Democrats and Republicans could serve as a turning point. “A deal to end the shutdown will likely bring gold down,” he said.
Agar recalled that gold’s major rally began in 2023 amid the Israel-Palestine conflict, which spurred global safe-haven demand. “Now that peace talks are progressing, gold should ideally be cooling, but instead it’s being driven by FOMO – the fear of missing out,” he observed.
He cautioned that the international market remained heavily overbought, and a correction of at least $200 was “almost certain” once sentiment shifted. “If gold reaches $4,020 to $4,050 in the spot market, we could see a pullback. After that, prices may stabilise for a few months,” he said.
Despite short-term risks, major institutions remain optimistic in the long term. Goldman Sachs has projected that gold could reach $4,900 by December 2026. At the current pace, that looks aggressive, but their forecast is based on a year’s horizon, not three months, Agar said.
Meanwhile, the Pakistani rupee edged slightly higher against the US dollar, appreciating by 0.01% in the inter-bank market. By the day’s close, the local currency stood at 281.22 per dollar, marking a modest gain of three paisa from Monday’s close at 281.25.
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Trump administration in advanced talks for a rescue package for Spirit Airlines, source says
A Spirit commercial airliner prepares to land at San Diego International Airport in San Diego, California, U.S., January 18, 2024.
Mike Blake | Reuters
The Trump administration is in advanced talks for a financing package for Spirit Airlines as the carrier is facing the risk of a liquidation, according to a person familiar with the matter.
Spirit had been facing a potentially imminent liquidation, people familiar with the matter told CNBC last week, speaking on the condition of anonymity to discuss matters that had not yet been made public. The Dania Beach, Florida-based carrier in August filed for its second Chapter 11 bankruptcy in less than a year, after it struggled to increase revenue to cover rising costs.
President Donald Trump hinted at potential government aid on Tuesday, telling CNBC’s “Squawk Box“, “Spirit’s in trouble, and I’d love somebody to buy Spirit. It’s 14,000 jobs, and maybe the federal government should help that one out.”
The White House didn’t immediately comment.
“We are hopeful that the government will recognize the needs for emergency funds especially in the current economic environment,” a spokesperson for the Associated of Flight Attendants-CWA, which represents Spirit’s cabin crews, said in a statement. “The last thing our economy needs is tens of thousands more people out of work and the last thing the travelling public needs is fewer choices in air travel.”
The terms of the financing deal weren’t immediately known. The Wall Street Journal earlier reported that the talks were in an advanced stage.
The U.S. airline industry accepted more than $50 billion in taxpayer aid to weather the Covid-19 pandemic, which is still its biggest-ever crisis, but those funds weren’t handed to one specific airline. Some of the aid gave the U.S. government stock warrants for airlines.
Airlines also received a government bailout following the Sept. 11, 2001, terrorist attacks, but that money was also for more than one company. The U.S. in 2008-2009 also bailed out the auto industry during the financial crisis and took stakes in manufacturers.
The Trump administration has taken equity stakes in some companies it deemed critical to national security like Intel and USA RareEarth, though Spirit stands out as it is in bankruptcy.
In February, Spirit said it expected to exit bankruptcy in late spring or early summer, telling a U.S. court that it would shrink and focus its planes on high-demand routes and travel periods. Pilot and flight attendant unions had also made concessions, including going on furlough in recent months, in a bid to help Spirit survive.
But jet fuel prices have nearly doubled in some parts of the U.S. since then, further adding to challenges for Spirit and the rest of the airline industry.
As a low-fare airline that also faces competition from larger carriers with their own no-frills, basic economy offerings, it has grown harder for Spirit to cover expenses. Spirit had introduced extra-legroom seats and other premium options to try to cater to higher-spending customers.
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