Steady demand keeps gold hovering around Rs217,000 in domestic bullion

April 17, 2023 (MLN): Domestic bullion experienced a mixed day on Monday, with gold prices falling marginally as the price of 24-Karat gold declined to Rs217,100 per tola, down by Rs1,500 from the previous day’s price.

According to the Karachi Sarafa Association, the price of 10-gram 24-karat gold also saw a decrease, falling to Rs186,128, while 10-gram 22-karat gold stood at Rs170,618.

Silver prices also saw a decline in the local market, with the price of 24-Karat silver dropping to Rs2,530 per tola, down by Rs40 from the previous day. Similarly, the price of 10-gram 24-Karat silver decreased to Rs2,170, plunged by Rs33.36.

In the international market, gold prices continued to hover above the key $2,000 level, with the spot price currently at $2,008.72, up 0.27%. U.S. Gold futures trading at $2,022, up 0.31%.

Investors are keeping a close eye on the U.S. Federal Reserve’s interest rate hike trajectory, which could impact the demand for gold.

On Friday, gold prices dropped 2% following a bounce in the dollar and comments from Fed officials about the need for another interest rate hike.

However, Carlo Alberto De Casa, an external analyst at Kinesis Money, noted that despite this correction, the $1,980-$2,000 zone remains a promising support level for the metal, Reuters reported.

The possibility of another interest rate hike next month was also suggested by Fed Governor Christopher Waller and Atlanta Fed President Raphael Bostic.

The CME FedWatch tool indicates that markets are pricing in an 86% chance of a 25 bp hike in May, which could limit gold’s upward momentum.

The rising interest rates also make non-yielding bullion less attractive to investors. Moreover, the dollar index was 0.1% higher, making gold more expensive for overseas buyers. Benchmark Treasury yields were at their highest in two weeks, further limiting gold’s upside potential.

This week, investors are keeping an eye on commentary from European Central Bank (ECB) officials, including President Christine Lagarde, as well as speeches by New York Fed President John Williams and Cleveland Fed President Loretta Mester.

In line with gold, silver prices also saw a marginal increase, with the price of spot silver currently at $25.42, up 0.41%.

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