Gold prices dip by Rs4,000 per tola

June 14, 2023 (MLN): Domestic bullion fell on Tuesday, with 24-karat gold reaching Rs221,500 per tola, dipping by Rs4,000.

According to the Karachi Sarafa Association, the price of 10-gram 24-karat gold reached Rs189,900 per tola, shrunken by Rs3,430.

While 10-gram 22-karat gold stood at Rs174,075 per tola.

Whereas, the price of silver remained unchanged in the domestic market, with 24-karat silver closing at Rs2,650 per tola and the price of 10-gram 24-karat silver closing at Rs2,272 per tola.

International spot gold is trading at $1,961.00 rising by 0.28% on the day.

The U.S. consumer price index (CPI) for the month of May 2023 clocked in at 4% YoY, compared to 4.9% YoY in April.

This is below analysts’ expectations of 4.1% in May, indicating a moderation of inflationary pressures.

Notably, CPI in the last year, May 2022 stood at 8.6% YoY, showing that the federal reserve with its fast-paced rate hikes and balance sheet reductions has been successful in curbing inflation to some extent.

However, it still remains way above the country's 2% inflation goal.

Thereby, market participants are now closely monitoring the upcoming Federal Reserve open committee figures for June due to be released on Wednesday.

CME FedWatch Tool is pricing in an 89.6% chance of interest rates pause at the upcoming June 13-14 meeting.

Federal Reserve Chair Jerome Powell to deliver speech at 11:30 PM.

Interest rates and gold have an inverse relationship, as gold loses its attractiveness in an environment of high-interest rates.

The U.S. dollar index (DXY) declined by  0.31% on the day, this makes dollar-denominated gold cheaper for investors holding other currencies.

Meanwhile, international spot silver is trading at $24.15, marking an increase of 0.76% on the day.

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