In a significant market development, the price of 24-karat gold in the local bullion market took a sharp nosedive, plummeting by Rs3,500 to Rs210,800 per tola.
This dramatic downturn comes in the wake of hotter-than-expected US inflation data, which has sparked speculation that the Federal Reserve may delay anticipated rate cuts.
According to the Karachi Sarafa Association, the price of 10-gramme 24-karat gold saw a notable decline, settling at Rs180,727, marking a loss of Rs3,001 compared to the previous session. Similarly, the price of 10-gramme 22-karat gold fell to Rs165,666.
The downward trend extended to silver prices as well, with 24-karat silver being sold at Rs2,580 per tola, showing a decrease of Rs20 day-over-day. The 10-gramme silver price also experienced a dip, dropping by Rs17.15 to Rs2,211.93.
On the global stage, international spot gold slipped below $2,000 for the first time in two months, experiencing a 1.34 per cent decline or $27.
This shift follows the release of American Consumer Price Index (CPI) data, which disappointed investors after a recent downturn in price pressures had fostered expectations for rate cuts this year, as reported by Bloomberg.
Federal Reserve Chairman Jerome Powell’s cautious stance, echoed by other Fed speakers, gained credence in light of the CPI figures.
Swap contracts referencing Fed policy meetings, which previously indicated a high likelihood of a rate cut in May and substantial easing by year-end, were significantly affected.
The odds of a May cut dropped to about 32 per cent from 64 per cent prior to the inflation data, with expectations for fewer than 90 basis points of easing this year.
