July 20, 2023 (MLN): Gold prices saw a major drop in prices on Thursday, with 24-karat gold shedding Rs5,300 per tola to stand at Rsx, after surging by Rs13,200 per tola in the past three sessions of the week.
According to the Karachi Sarafa Association, the price of 10-gram 24-karat gold reached Rs189,558 per tola, down by Rs4,544.
While 10-gram 22-karat gold stood at Rs173,761 per tola, deflating by Rs4,165.
Contrarily, the price of silver remained unchanged in the domestic market, with 24-karat silver to close at Rs2,900 per tola and the price of 10-gram 24-karat silver closing at Rs2,486 per tola.
On the other hand, international spot gold is currently trading at $1,970.40 down by 0.38% on the day, as the dollar and bond yields ticked higher.
The U.S. dollar index (DXY) is currently 0.53% higher on the day, this makes dollar-denominated gold expensive for investors holding other currencies.
“The yields and dollar have actually bounced a little, so we’re seeing a slight reverse effect in gold. Also this $2,000 area is going to be a bit of a challenge for the gold market in the short-term,” said David Meger, director of metals trading at High Ridge Futures, as Reuters reported.
CME FedWatch Tool is pricing in a 99.8% chance of an interest rate hike at the upcoming July 26 meeting.
Interest rates and gold have an inverse relationship, as gold loses its attractiveness in an environment of high interest rates.
Meanwhile, international spot silver is currently trading at $24.89, dipping by -1.08% on the day.
