Gold price falls Rs200 per tola in Pakistan

Karachi: Gold prices plunged in Pakistan on Monday in line with the decrease in the international rate. The price of the yellow metal settled at Rs241,500 after a single-day loss of Rs200.

The 10-gram gold was sold at Rs207,047 after it registered a decrease of Rs172, according to rates shared by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). Gold price remained unchanged at Rs241,700 on Saturday.

The international rate of gold decreased by $2 to settle at $2,324 per ounce (with a premium of $20) on Monday.

Gold holds ground

Gold prices held steady on Monday after data showed U.S. inflation subsided, bolstering hopes that the Federal Reserve will start cutting interest rates this year.

Spot gold rose 0.1% at $2,327.12 per ounce, as of 0202 GMT. Prices jumped more than 4% in the second quarter.

U.S. gold futures eased 0.1% at $2,336.60.

Data showed on Friday that the personal consumption expenditures index, increased 2.6% after advancing 2.7% in April. May inflation readings were in line with economists’ expectations.

“The latest U.S. inflation data remain fresh on investors’ mind, with the data coming in line with consensus and generally did little to sway current market rate expectations for the Fed’s easing process to kickstart in September,” said IG market strategist Yeap Jun Rong.

But, “any failure to defend the $2,280 level ahead may potentially pave the way for gold prices to head towards the $2,200 next”.

Traders are pricing in a 63% chance of a first rate cut in September, according to the CME FedWatch tool. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Market focus shifts to remarks from Fed Chair Jerome Powell on Tuesday, followed by minutes from the Fed’s latest policy meeting on Wednesday and U.S. labour market data later in the week.

“Uncertainties related to inflation, macroeconomic growth, U.S. election and geopolitics should continue to support the safe haven demand for gold,” ANZ said in a quarterly note.

“Although central bank purchases have slowed down in recent months, we believe emerging market’s central banks will continue to diversify their reserves into gold.”

Spot silver was flat at $29.12 per ounce, platinum fell 0.2% at $990.90 and palladium inched up 1.1% to $982.62.

Key metals consumer China’s manufacturing activity fell for a second month in June while services activity slowed, an official survey showed.

Additional input from Reuters