24-Karat gold price drops by Rs1,900 per tola to Rs200,100

October 16, 2023 (MLN): Domestic bullion started the week on a lower note, with the price of 24-karat gold decreasing by Rs1,900 per tola to close at Rs200,100.

The Karachi Sarafa Association reported that the price of 10-gram 24-karat gold declined by Rs1,629 to Rs171,553 at closing.

While 10-gram 22-karat gold stood at Rs157,257, down by Rs2,357 compared to the previous close.

It is important that the 24-karat gold closed last week with a gain of Rs2,500 per tola or 1.25% driven by the uptick in international gold prices.

However, today's drop in bullion prices can be attributed to the strengthening of the PKR, coupled with a decline in international prices.

The pressure resulting from the strengthening of the Pakistani Rupee (PKR) still lingers over the gold market.

The domestic currency gained 79 paisa against the U.S. Dollar in today’s session, extending its upward trajectory to 28 consecutive trading sessions.

Gold is denominated in U.S. dollars, hence when the PKR strengthens against the USD, the value of PKR-denominated gold falls.

International gold prices witnessed a drop of 0.84%, currently trading at $1915.14.

Investors began locking in their profits, leading to technical selling and exerting pressure on prices, as Reuters reported.

However, concerns about a potential escalation of conflict in the Middle East kept the bullion above the psychologically significant $1,900 per ounce level.

 “Gold is holding up well because we still have a lot of uncertainty related to the Middle East and the potential for that to evolve into something very serious,” said Ole Hansen, head of commodity strategy at Saxo Bank.

“We need to see whether there are enough movements in bonds and dollar to support these current levels or any further escalation in the Middle East, is what is required to send gold prices higher,” he added.

The price of silver remained unchanged in the domestic market, with 24-karat and 10-gram 24-karat silver closing at Rs2,500 and Rs2,143 respectively.

Meanwhile, the price of international silver has declined by 0.47%, currently trading at $22.6.

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