Gold price plummets by Rs1,500 per tola in Pakistan

Karachi: The gold price fell by Rs1,500 per tola in the local bullion market on Monday.

According to Sindh Sarafa Bazaar Jewelelrs Association, the per tola price of gold closed at Rs144,700 per tola while per 10 grams price of gold fell by Rs1.286 to close at Rs132,630.

In the international market, the value of gold touched $1,662 with an increase of $13 per ounce.

International gold prices weakened on Monday, back towards a 29-month low hit on Friday, as the dollar and Treasury yields rose on expectations the US Federal Reserve will deliver a steep rate hike when it meets this week.

Spot gold slid 0.7% to $1,663.55 an ounce by 10:11 a.m. ET (1411 GMT), holding above its lowest since April 2020 hit on Friday.

US gold futures fell 0.6% to $1,673.50.

“(Gold) is still hanging around its lows and a big part of this is anticipation of the Fed announcement on Wednesday,” said Daniel Pavilonis, senior market strategist at RJO Futures, adding higher Treasury yields were also pressuring prices.

The Fed, at the conclusion of its two-day policy meeting on Wednesday, is expected to raise interest rates by 75 basis points to combat stubbornly-high inflation, with markets even seeing a 20% chance for a 100 bps increase.

Concerns about surging inflation have also prompted other central banks to tighten monetary policy.

Although gold is considered a hedge against inflation, higher interest rates lift the opportunity cost of holding zero-yield bullion.

The dollar held close to two-decade highs, making greenback-priced bullion more expensive for overseas buyers.

Benchmark 10-year US Treasury yields rose to their highest in over 11 years.

“Traders and investors appear to be favouring the perceived safe-haven greenback and US Treasuries over the precious metals,” Jim Wyckoff, senior analyst at Kitco Metals, said in a note.

Elsewhere, silver lost 1.1% to $19.35 an ounce, platinum fell 0.3% to $904.66 and palladium slipped 0.8% to $2,118.20.

The bullion market in London - the world’s biggest trade centre for physical gold - was closed for Queen Elizabeth’s funeral which limited trade volumes on Monday.

-- Additional input from REUTERS