ISLAMABAD: Gold prices continued losing traction in local and global markets on Thursday, with the price of one tola of 24-karat gold dipping by Rs1,700 in the country. According to the All-Pakistan Gems and Jewellers Association’s (APSGJA) data, the price of one tola of 24-karat gold decreased by Rs1,700 to Rs217,000 from Rs218,700. Similarly, the gold rate for 10 grams of 24-karat moved down to Rs186,050 from Rs187,500, showing a decrease of Rs1,450. Following suit, the gold price for 22-karat was recorded at Rs198,900 per tola and Rs170,550 per 10 grams. In the international market, as of 1355 hours GMT, gold futures were available at $1,921.20 per ounce, showing a decrease of $11.40 (-0.59 percent). Out of the $11.40 per ounce decrease, -$1.30 was due to strengthening of the US dollar and -$10.10 was due to predominant sellers, according to Kitco Gold Index. TLTP
Gold price continues to fluctuate in a narrow channel at around $1,930. The benchmark 10-year US Treasury bond yield recovered toward 3.75 percent following an earlier pullback, making it difficult for gold prices to gather bullish momentum.
The precious metal is under pressure after the US Federal Reserve Chair Powell on Wednesday told Congress in his half-year testimony on the economy that further rate hikes would be necessary to fight inflation. Powell’s testimony continues later on Thursday, and additional comments could also sway oil, equity, and bond markets.
Commenting on last week’s decision to hold interest rates unchanged, Power said, “We didn’t use the word pause and I wouldn’t use it here today.” The outlook for two more rate hikes by the end of 2023, included in the Summary of Economic Projections released by the Fed last week, “is a pretty good guess of what will happen if the economy performs about as expected,” Powell said.
In a similar move, the Bank of England on Thursday surprised markets with a large 50-basis-point interest rate hike, the 13th consecutive increase, after inflation data from Wednesday showed the UK’s May inflation was stuck at an annual 8.7 percent, flat compared to April and higher than expectations. These rate hikes weighed on gold prices.
