Wednesday Sep 21 2022

Gold holds steady as investors eye Fed meeting

A representational image of gold jewellery. — Reuters/File
A representational image of gold jewellery. — Reuters/File

  • Gold price settles at Rs155,100 per tola.
  • Rates in Pakistan are around Rs2,000 below cost.
  • Silver prices in domestic market remain unchanged.

KARACHI: Gold prices in Pakistan held steady on Wednesday, caught between inflationary pressure and a stronger dollar, as investors watched for signs from Federal Reserve meeting.

Data released by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of precious metals settled at Rs155,100 and Rs132,973 respectively.

Gold's movement was kept in check as investors also sought refuge in the dollar, which scaled a fresh two-decade high versus a basket of other currencies, making bullion more expensive for overseas buyers.

Local and international investors' focus remained on the Fed's policy decision due at 1800 GMT, with traders pricing in an 81% chance of another 75 basis-point rate hike and a 19% probability of a 100 bps increase.

While gold is considered a safe investment during political and financial uncertainties, rising rates dull its appeal since it yields no interest.

In the international market, the price of yellow metal rose by $5 per ounce; however, it failed to cross the psychological barrier of $1,700. The price settled at $1,674 after Russian President Vladimir Putin's partial mobilisation announcement re-ignited some safe-haven interest in bullion, although a strong dollar and expected US rate hikes capped gains.

Gold rates in Pakistan are around Rs2,000 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,570 per tola and Rs1,346.02 per 10 grams.

— Additional input from Reuters