Tuesday saw a little decrease in the price of gold per tola rate in Pakistan, with 24-karat gold selling for Rs245,000 per tola—a reduction of Rs100 per tola. It is important to note that a decrease in purchasing power has maintained the price Rs2,200 below what it would actually cost today.
24-KARAT GOLD PRICE IN KARACHI SARAF ASSOCIATION
The price of 24-karat gold per 10-gram was reported by the Karachi Sarafa Association to be Rs210,048 per tola, a decrease of Rs86 per tola. In a similar vein, a lower price of Rs192,544 per 10-gram was reported for 22-karat gold.
SILVER PRICES REMAIN UNCHANGED
On the other hand, silver prices remained unchanged in the domestic market, with 24-karat silver being sold at Rs2,900 per tola and Rs2,486 per 10-gram.
GOLD (XAU/USD) STABILIZES IN THE $2,360s AFTER HEAVY SELLOFF
Gold (XAU/USD) is trading flat in the $2,360s on Tuesday – stabilizing after the heavy sell-off on Monday. Gold’s weakness at the start of the week came after the news that the People’s Bank of China (PBoC), one of the largest consumers of Gold in the world, had not bought any Gold for the second month in a row in June, after 18 consecutive months of reserve-building, according to data from the PBoC.
IMPACT OF TRUMP ON BOND MARKETS DRAGS GOLD DOWN
Gold has also declined as a result of the US Treasury bond market absorbing political risk from an increased chance that former President Donald Trump will win the US presidential election in November.
TRUMP’S FISCAL POLICIES AND GOLD’S RESPONSE
If Trump wins the presidency, he is expected to cut taxes and borrow, leading to a worsening fiscal position for the US. Critics say his fiscal profligacy will lead to higher inflation, which in turn will keep interest rates high. Gold is falling because it is a non-interest-bearing asset that becomes less attractive to investors when interest rates are high.
FED CHAIRMAN POWELL’S TESTIMONY TO INFLUENCE GOLD
A key event for Gold that could move the price on Tuesday is Federal Reserve (Fed) Chairman Jerome Powell’s bi-annual testimony to the Senate Banking Committee. It is expected he will maintain his cautious data-dependent approach, leaving investors still guessing as to the timing of the Fed’s next move.
TECHNICAL ANALYSIS: GOLD FORMS A TWO-BAR REVERSAL
Technical Analysis: Gold has formed a two-bar reversal pattern (green shaded rectangle) after climbing to a major resistance level at the June 7 high at $2,388. This pattern forms after a long green-up day is followed by a long red-down day of a similar length and size. When this occurs at a market top, it can be a short-term reversal sign.
