Domestic gold price drops Rs2,000 per tola

April 30, 2024 (MLN): The domestic bullion market has experienced its third consecutive decline, with the price of 24-karat gold dropping by Rs2,000 per tola to Rs241,900 on Tuesday.

Last week, 24-karat gold dropped by Rs7,800 per tola to close at Rs244,400 on easing Middle East tensions.

The Karachi Sarafa Association further reported that the price of 24-karat gold at Rs207,390 per 10-gram, down Rs1,715 DoD.

Similarly, the price of 22-karat gold was quoted lower at Rs190.108 per 10-gram.

On the global front, international spot gold is currently trading at $2,316.38, down by 0.82% compared to the last close.

Gold fell, narrowing what is set to be its third straight month of gains as investor focus turned to this week’s Federal Reserve rate-decision meeting at which policymakers are expected to strike a hawkish tone, as Bloomberg reported.

Bullion edged lower to trade around $2,320 an ounce, though it was still up about 4% for the month ahead of the Federal Open Market Committee decision on Wednesday.

Officials are seen making a hawkish pivot following hotter-than-expected inflation data, with the possibility that the central bank may be forced to backtrack from Fed Chair Jerome Powell’s hints of swifter rate cuts back in December.

Swaps traders are now pricing for the Fed to deliver at most two cuts by the end of the year, the fewest number of expected reductions since November 2023. Higher rates are typically negative for gold as it doesn’t pay interest.

Despite the timeline for Fed cuts being pushed back, the precious metal has climbed more than 12% this year amid robust demand from Asian markets, especially China and elevated geopolitical tensions from Ukraine to the Middle East.

Gold demand from central banks posted its strongest start to any year on record in the first quarter, the World Gold Council said Tuesday.

Bullion has also seen some support from a weaker US dollar, which slumped Monday after the yen surged amid speculation the Japanese government intervened to support its currency for the first time since 2022.

Any further action could weigh on the greenback, making bullion more attractive to investors as the metal is priced in the currency.

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