Gold prices dip Rs8,800, hitting Rs207,200 per tola

July 03, 2023 (MLN): Domestic bullion went down on Monday, with 24-karat gold reaching Rs207,200 per tola, dipping by Rs8,800.

This significant decline is associated with the long-standing Staff Level Agreement (SLA) worth $3 billion finally being signed on Friday between the International Monetary Fund (IMF) and Pakistan.

Consequently, the demand for safe haven was reduced.

Furthermore, the Pakistani rupee (PKR) appreciated by 5 rupees against the US dollar in the open market on Monday as the currency was quoted at PKR 275 (bid) and PKR 285 (ask) per USD.

It is worth noting that in the outgoing month of June, gold prices dipped significantly by 11.6%.

According to the Karachi Sarafa Association, the price of 10-gram 24-karat gold reached Rs177,641 per tola, decreasing by Rs7,544.

While 10-gram 22-karat gold stood at Rs162,837 per tola, contracting by Rs6,916.

Meanwhile, the price of silver remained unchanged in the domestic market, with 24-karat silver to close at Rs2,500 per tola and the price of 10-gram 24-karat silver closing at Rs2,143 per tola, losing Rs42.87

On the other hand, international spot gold is currently trading at $1,915.66 down by -0.12% on the day.

Carlo Alberto De Casa, external analyst at Kinesis Money stated that there has been a slight decline in safe-haven gold due mainly to the risk-on mood in the market, as Reuters reported.

Markets are pricing in an 84.3% 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.

Interest rates and gold prices have an inverse relationship as higher interest rates discourage investment in non-yielding gold.

Meanwhile, international spot silver is currently trading at $22.87, up by 0.56% on the day.

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