Domestic gold rebounds, gains Rs800 per tola

May 27, 2024 (MLN): The domestic bullion market has witnessed a rebound from the losses of the past week, with the price of 24-karat gold rising by Rs800 to Rs240,800 per tola on Monday.

Gold rates were on the spike due to a massive rally in the international market, this prompted gold dealers to underprice the yellow metal by Rs4,000 due to a significant reduction in purchasing power.

However, rates are now being quoted based on the transparent international rate, incorporating the effect of changes in the exchange rate, due to the massive drop last week.

The Karachi Sarafa Association reported the price of 24-karat gold at Rs206,447 per 10-gram, up by Rs686.

Similarly, the price of 22-karat gold was quoted higher at Rs189,243 per 10-gram.

Moreover, silver prices remained unchanged in the domestic market, with 24-karat silver being sold at Rs2,800 per tola and Rs2,400.54 per 10-gram.

International gold is currently trading at $2,343.37, up by 0.41% or $9.8 per ounce compared to the last close.

Investors are assessing the diminishing bets of U.S. interest rate cuts ahead of a key inflation report due later in the week.

Last week, the Federal Reserve's most recent policy minutes of the meeting indicated officials would keep interest rates higher for longer as they struggle to bring inflation down to target.

Moreover, China’s bullion imports slowed last month as demand in the world’s biggest consumer began to buckle in the face of record prices.

Overseas purchases of physical gold fell to 136 tons in April, a 30% decline from the previous month and the lowest total for the year, according to the latest customs data.

"Gold has suffered from more hawkish perceived comments from Fed officials and better-than-expected U.S. economic data, with market participants shifting again back the timing of the first Fed rate cut," UBS analyst Giovanni Staunovo said, as Reuters reported.

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