Daily Times

Spot gold price fell sharply on Monday in global markets amid a strong US dollar and firm treasury bond yields. As of 1235 hours GMT, gold in the international market was available at $1,867.30 per ounce, shedding $15.80 (-0.84 percent). Out of the $15.80 per ounce decrease, -$2.50 was due to strengthening of the US dollar and -$13.30 was due to predominant sellers, according to Kitco Gold Index.

However, the price of 10 grams of 24-carat yellow metal in Pakistan, increased to Rs113,100 after gaining Rs650. Gold price in the local market settled at Rs112,450 on Saturday last. An increase in the local gold prices was due to the Pakistani rupee’s depreciation against the US dollar, which devalued by 0.48 percent during the day.

Gold stayed under bearish pressure during the day and touched its lowest level in nearly a week at $1,856 during the intra-day trading. The benchmark 10-year US Treasury bond yield was up nearly one percent on the day, weighing on the gold prices. The benchmark 10-year US rates traded at 3.20 percent, the highest level since December 2018.

After a turbulent last week, dominated by the central banks, global growth fears are back to the fore amid extended Chinese Covid-19 curbs and fears over interest rate hikes. In times of market panic and uncertainty, the dollar remains in cruise control, courtesy of its appeal as an ultimate safe haven. A stronger dollar weighs heavily on gold while the rally in the treasury yields exacerbates the pain in the non-yielding yellow metal.

Earlier, gold prices decreased for the third straight week by 0.72 percent on Friday last amid a worsening demand outlook due to strong US dollar and firm bond yields. Gold is considered a hedge against inflation and geopolitical risks. However, rising US interest rates raised the opportunity cost of holding non-yielding bullion and boosted the greenback in which gold is priced.