June 23, 2023 (MLN): Domestic bullion continued its downward trajectory on Friday as 24-karat gold dipped by Rs1,500, reaching Rs217,000 per tola.

The Karachi Sarafa Association, a reputable jeweler in the precious metals market, reported that the price of 10-gram 24-karat gold reached Rs186,043 per tola, reflecting a fall of Rs1,285.

While 10-gram 22-karat gold stood at Rs170,539 per tola, down by Rs1,179.

Whereas, the price of silver remained unchanged in the domestic market, with 24-karat silver to close at Rs2,550 per tola and the price of 10-gram 24-karat silver settling at Rs2,186 per tola.

On the other hand, international spot gold is currently trading at $1,919.98 expanding by 0.30% on the day.

The U.S. dollar index (DXY) is currently 0.55% higher on the day, this makes dollar-denominated gold expensive for investors holding other currencies.

Moreover, Federal Reserve chair Jerome Powell said that policymakers expect interest rates to move higher, but at a more moderate pace to reduce the hardship that high inflation is causing.

But Fed officials estimated rates would rise to 5.6% by the end of the year, according to their median projection, implying two additional quarter-point hikes following surprisingly persistent inflation and labor-market strength.

Edward Moya, senior market analyst at OANDA said, “We are seeing a de-risking moment on Wall Street, stocks are selling off hard and demand for Treasuries is elevated,” as Reuters reported.

Notably, interest rate hikes raise the opportunity cost of holding non-yielding gold.

The Bank of England raised its key interest rate by 50 basis points to 5%, seeking to curb the highest inflation in any major economy.

This hike is significantly larger than anticipated, as the majority of market participants were only expecting a 25bps increase.

Meanwhile, international spot silver is currently trading at $22.35, expanding by 0.54% on the day.

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Posted on: 2023-06-23T21:45:04+05:00