Gold prices extend downward slide, hitting Rs220,500 per tola

June 20, 2023 (MLN): Domestic bullion continued the downward trajectory, with 24-karat gold reaching Rs220,500 per tola on Tuesday, down by Rs200.

As per the Karachi Sarafa Association, the price of 10-gram 24-karat gold reached Rs189,043 per tola, shrunken by Rs171.

While 10-gram 22-karat gold stood at Rs173,290 per tola, slid by Rs157.

Similarly, the price of silver declined in the domestic market, with 24-karat silver falling by Rs50 to close at Rs2,600 per tola and the price of 10-gram 24-karat silver reaching Rs2,186 per tola, losing Rs85.73.

Moreover, international spot gold is currently trading at $1,934.26 falling by -0.92% on the day.

U.S. single-family homebuilding surged in May to its highest in more than a year and permits issued for future construction also climbed, as Reuters reported.

Daniel Pavilonis, senior market strategist, RJO Futures stated that the blown-out number is negatively impacting the gold market which was already experiencing weakness following the previous interest rate decision.

Investors are looking forward to Fed chair Jerome Powell, who is set to deliver congressional testimonies on Wednesday and Thursday, along with several other feds throughout the week.

Markets are pricing in a 74.4% 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.

Furthermore, The Bank of England will also meet on Thursday and is expected to raise interest rates by 25 bps to a 15-year high of 4.75%.

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

Meanwhile, international spot silver is currently trading at $23.15, down by -3.54% on the day.

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