ISLAMABAD: Gold prices in the local market remained on a downward slide and decreased by Rs1,000 on Tuesday, following the rupee’s appreciation against the US dollar and a consistent decline in international bullion prices. The price of one tola of 24-karat gold decreased to Rs201,000 from Rs202,000. Similarly, the gold price for 10 grams of 24-karat decreased to Rs172,340 from Rs173,200. On the other hand, as of 1300 hours GMT, gold futures in the international market were available at $1,823.80 per ounce, showing a decrease of $3.90. Out of the $3.90 decrease, -$2.90 was due to strengthening of the US dollar and -$1 was due to predominant sellers, according to the Kitco Gold Index. TLTP
Gold price staged a correction and stabilised above $1,820 after falling to a multi-month low of $1,815 during early trading hours on Tuesday. The benchmark 10-year US Treasury bond yield held at 4.69 percent, not allowing the gold prices to extend its rebound.
Gold price has been trending lower over the past two weeks or so in the wake of the Federal Reserve’s signal that sticky inflation was likely to attract at least one more rate hike in 2023. Moreover, several Fed officials backed the case to keep rates restrictive for longer to bring inflation to the 2% target.
Adding to this, the incoming resilient macro data from the United States supports prospects for further policy tightening by the Fed. This, in turn, remains supportive of elevated US Treasury bond yields, which lifts the US dollar to its highest level since November 2022 and drives flows away from the non-yielding yellow metal. The downward trajectory prolongs for the seventh successive day and drags the gold price to its lowest level since March 9.
The fall in the precious metal’s value in the local market was witnessed after the rupee’s upward movement. It is to be noted that local bullion pricing bodies, Karachi Sarafa Market and All Pakistan Gems and Jewelers Association, have refrained from announcing daily commodity prices since September 13 and the prices quoted above are being collected from different markets. This decision follows a crackdown on alleged betting and smuggling activities by certain institutions.
This is sparking speculation about potential actions against gold smugglers or a downward trend in the country’s precious metal market, leading to silence from the pricing body. It is worth noting that in the absence of official gold rates, consumers at jewelry shops are experiencing a state of confusion.
