ISLAMABAD: Gold prices in the local market decreased by Rs1,200 a tola on Wednesday, following an overnight dip in the international bullion market.
According to the Karachi Sarafa Association, the price of one tola of 24-karat gold decreased to Rs211,800 from Rs213,000. Similarly, the gold price for 10 grams of 24-karat gold decreased to Rs181,584 from Rs182,613, showing a decrease of Rs1,029. Following suit, the price for 10 grams of 22-karat gold fell down by Rs236 to Rs166,452 from Rs166,688 as compared to the last session.
The downward momentum in gold prices can be attributed to the decreasing gold prices internationally. However, the rupee’s depreciation against the US dollar capped the loss. The rupee depreciated for the eighth straight session against the greenback.
On the other hand, as of 1205 hours GMT, gold futures in the international market were available at $1,984 per ounce, showing an increase of $0.70. Out of the $0.70 increase, -$3.55 was due to weakening of the US dollar and +$4.25 was due to predominant buyers, according to the Kitco Gold Index.
Gold price inched up after its two-day losing spell as investors remained cautious ahead of the interest rate decision by the Federal Reserve. The precious metal fell sharply even though markets widely expected that the Fed would keep interest rates unchanged in the 5.25pc-5.50pc range. However, a hawkish interest rate outlook was highly anticipated as robust spending by households and strong labor market conditions kept upside inflation risks alive.
Fed Chair Jerome Powell and his colleagues may keep the likelihood of further policy tightening on the table as the progress in inflation easing toward the 2 percent target has slowed due to strong wage growth. The US households having high purchasing power are spending heavily, keeping core Personal Consumption Expenditure price index relatively stubborn.
Apart from the upcoming Fed decision, the broader appeal for gold is still upbeat as Middle East tensions persist. The Israeli army is preparing for the ground incursion in Gaza as Israeli authorities rejected calls for a ceasefire. – TLTP
