ISLAMABAD: Gold prices in the local market lost traction on Thursday and fell by Rs650 per tola following an overnight dip in the international bullion prices.
According to the Karachi Sarafa Association, the price of one tola of 24-karat gold decreased to Rs215,850 from Rs216,500. Similarly, the gold price for 10 grams of 24-karat gold decreased to Rs185,057 from Rs185,823, showing a dip of Rs766.
The Pakistani rupee snapped a five-day winning streak against the US dollar in the inter-bank market and depreciated by 14 paisas to 285.27. In the open market, the local unit remained unchanged at 284 for buying and 287 for selling. Rupee’s depreciation makes gold costlier for local buyers if all other factors remain the same as gold is rated in US dollars. During the last week, gold prices in the local market increased by Rs5,500 per tola.
On the other hand, as of 1315 hours GMT, gold futures in the international market were available at $1,992.50 per ounce, showing an increase of $3.20. Out of the $3.20 increase, +$1.75 was due to weakening of the US dollar and +$1.45 was due to predominant buyers, according to the Kitco Gold Index.
Gold price caught fresh bids and stuck to its modest intraday gains through the first half of the European session. The precious metal remained below the $2,000 psychological mark, warranting caution for bullish traders on the back of the recent repeated failures near the $2,010 horizontal barrier. Traders might also refrain from placing aggressive bets amid a relatively light trading session in the wake of the US Thanksgiving holiday.
The downside for the gold price, however, remained cushioned in the wake of growing acceptance that the Federal Reserve will not hike interest rates further. Moreover, the current market pricing indicates a greater than 5 percent chance that the Fed will cut rates at the April 30-May 1, 2024 meeting. This, in turn, keeps the yield on the benchmark 10-year US government bond close to a two-month low, which is seen undermining the buck and acting as a tailwind for the non-yielding yellow metal. – TLTP