Gold falls Rs3,400 per tola as US inflation lifts rate-hike odds
Gold buyers got a second day of relief as per-tola prices fell Rs3,400 to Rs427,436, taking the two-session loss to Rs4,900 after Tuesday's Rs1,500 dip, the All-Pakistan Gems and Jewellers Sarafa Association's rates showed.
The 10-gram rate dropped Rs2,915 to Rs366,457. The trigger came from US inflation data: consumer prices rose 0.4% in October against expectations of 0.3%, and markets responded by pricing a 100% probability of a Federal Reserve rate hike in December.
Spot gold fell 0.8% to $3,999.42 an ounce by 11:39 am ET, extending Tuesday's nearly 3% slide, while December futures eased 0.6% to $4,006.50. "CPI came out a little hotter than expected and the market is interpreting that it warrants higher rates at the December meeting," said Bob Haberkorn, Senior Market Strategist at StoneX.
Higher rates weigh on bullion because the metal yields nothing, and a firmer dollar makes it costlier for buyers holding other currencies. Silver moved the other way locally, up Rs45 to Rs5,768 per tola, while palladium touched its highest since October 22.
The rupee edged up Rs0.03 to close at 276.62 against the dollar in the inter-bank market, compared with Tuesday's 276.65.
