Gold prices fall to Rs224,500 per tola, down Rs800

July 25, 2023 (MLN): Domestic bullion fell on Tuesday, with 24-karat gold reaching Rs224,500 per tola, marking a decline of Rs800.

It is worth noting, this decline comes on top of an Rs2,800 per tola increase in the previous trading session and a surge of Rs9,600 per tola, or 4.50% in the previous week.

The Karachi Sarafa Association, a reputable jeweler in the precious metals market, reported that the price of 10-gram 24-karat gold reached Rs192,473 per tola, reflecting a fall of Rs685.

While 10-gram 22-karat gold stood at Rs176,433 per tola, dipping by Rs629.

On the other hand, the price of silver remained unchanged in the domestic market, with 24-karat silver to close at Rs2,750 per tola and the price of 10-gram 24-karat silver closing at Rs2,358 per tola.

Contrarily, international spot gold is currently trading at $1,962.65 expanding by 0.40% on the day.

The gain is attributed to expectations that the U.S. Federal Reserve will likely end its monetary tightening cycle after a widely expected rate hike this week.

“Gold is expected to be in a range-bound trade before the Fed decision. But there is optimism here that the Fed is almost done with rate hikes and that will support the market,” said Edward Moya, senior market analyst at OANDA, as Reuters reported.

China’s top leaders pledged on Monday to step up policy support for the economy, focusing on boosting domestic demand.

“The remarks out of Beijing to work on more stimulus for the economy will be positive for retail demand for gold by Chinese consumers,” said Peter Fertig, analyst at Quantitative Commodity Research

CME FedWatch Tool is pricing a 98.9% chance of interest rates hike at the upcoming Fed meeting.

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 $24.69, rising by 1.25% on the day.

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