August 07, 2023 (MLN): Domestic bullion witnessed a downturn on Monday, with 24-karat gold priced at Rs221,700 per tola, contracting by Rs1,100.
The Karachi Sarafa Association, a reputable jeweler in the precious metals market, reported that the price of 10-gram 24-karat gold closed at Rs190,072 per tola, reflecting a fall of Rs944.
While 10-gram 22-karat gold stood at Rs174,233 per tola, contracting by Rs864.
It is worth noting that gold prices rose by Rs600 per tola last week as the Pakistani rupee (PKR) depreciated by 51.45 paisa or 0.18% against the US dollar in the week.
Since gold is denominated in U.S. dollars when the PKR depreciates against the U.S. dollar, the value of PKR-denominated gold rises.
Meanwhile, the price of silver remained unchanged in the domestic market, with 24-karat silver closing at Rs2,750 per tola and the price of 10-gram 24-karat silver closing at Rs2,358 per tola.
On the global front, international spot gold is currently trading at $1,934.53 down by -0.40% on the day.
Gold prices were on the back foot on Monday after Federal Reserve Governor Michelle Bowman indicated that additional interest rate hikes will likely be needed to rein in inflation, as Reuters reported.
Although gold is seen as a hedge against inflation, higher interest rates increase the opportunity cost of holding nonyielding bullion.
Market participants are now closely monitoring the upcoming U.S. Consumer Price Index (CPI) figure that will be released on Thursday.
“Our expectation is still that the trend points to low inflation and therefore the Fed doesn’t have to hike rates,” UBS analyst Giovanni Staunovo said.
Meanwhile, international spot silver is currently trading at $23.14, decreasing by -2.03% on the day.
