Gold prices slipped nearly 1% on Wednesday, weighed down by a jump in the rupee and hopes of revival of the International Monetary Fund (IMF) programme that could influence the economic scenario.
According to the data released by the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) plunged by Rs1,400 per tola and Rs1,200 per 10 grams to settle at Rs195,600 and Rs167,695, respectively.
The bargain hunters took advantage of recent losses, but the precious metal’s outlook was still clouded by prospects of further recovery of the rupee against the greenback as optimism regarding the revival of the IMF programme can boost the currency market’s sentiment.Cumulatively, the yellow metal gained Rs3,800 per tola during the last three sessions; however, the precious commodity snapped its winning streak today.Meanwhile, silver prices in the domestic market remained unchanged at Rs2,150 per tola and Rs1,843.27 per 10 grams, respectively.In the international market, gold price rose by $8 per ounce to settle at $1,840 as investors held off on big bets ahead of minutes from the US Federal Reserve’s latest policy meeting that could offer more cues on its rate-hike path.
“The market focus is on the Fed minutes which will be released later today but if there’s concerns about higher inflation or more persisting inflation scenarios then we could see gold prices potentially facing some headwinds,” Bank of China International analyst Xiao Fu said.
Minutes of the Fed’s latest meeting are due at 1900 GMT on Wednesday. The Fed raised rates by 25 basis points at its Jan. 31-Feb. 1 meeting, and is expected to raise benchmark rates above 5% by May with a peak seen at 5.347% in July.
Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion.Gold may retest a support of $1,830 per ounce, a break below which could open the way to $1,816, according to Reuters technical analyst Wang Tao.