June 22, 2023 (MLN): Domestic bullion fell on Thursday, with 24-karat gold reaching Rs218,500 per tola, decreasing by Rs200.
According to the Karachi Sarafa Association, the price of 10-gram 24-karat gold reached Rs187,328 per tola, dipping by Rs172.
While 10-gram 22-karat gold stood at Rs171,718 per tola, down by Rs157.
Meanwhile, the price of silver remained unchanged in the domestic market, with 24-karat silver to close at Rs2,550 per tola and the price of 10-gram 24-karat silver settling at Rs2,186 per tola.
On the other hand, international spot gold is currently trading at $1,917.68 shrinking by -0.83% on the day.
The U.S. dollar index (DXY) is currently 0.27% higher on the day, this makes dollar-denominated gold expensive for investors holding other currencies.
Notably, Federal Reserve chair Jerome Powell said that policymakers expect interest rates to move higher, but at a more moderate pace to reduce the hardship that high inflation is causing.
The Federal Open Market Committee paused its series of interest-rate hikes last week for the first time in 15 months, leaving rates in a range of 5% to 5.25%.
But Fed officials estimated rates would rise to 5.6% by the end of the year, according to their median projection, implying two additional quarter-point hikes following surprisingly persistent inflation and labor-market strength.
Moreover, markets are pricing in a 76.9% probability of the Fed hiking rates by 25 bps in July before holding steady for the remainder of the year, according to CME Fed WatchTool.
The Bank of England raised its key interest rate by 50 basis points to 5%, seeking to curb the highest inflation in any major economy.
This hike is significantly larger than anticipated, as the majority of market participants were only expecting a 25bps increase.
Additionally, Turkey’s central bank delivered a significant interest rate hike, raising it by 650 basis points to 15%.
Interest rates and gold have an inverse relationship, as in an environment of high-interest rates, gold loses its attractiveness.
While, international spot silver is currently trading at $22.46, dipping by -1.06% on the day.
Copyright Mettis Link News
Posted on: 2023-06-22T20:59:28+05:00
