24-Karat gold price surges by Rs5,200 per tola this week

March 03, 2024 (MLN): The domestic bullion market witnessed substantial gains this week, with the price of 24-karat gold surging by Rs5,200 per tola to Rs220,300 at close.

The Karachi Sarafa Association reported that 10-gram 24-karat gold settled the last trading session of the week at Rs188,872, reflecting a rise of Rs4,458 WoW.

While the price of 10-gram 22-karat gold was reported at Rs173,132 at close.

Last week, gold price in the domestic market broke free from its 2-week-long losing streak driven by a rise in international prices.

International spot gold climbed to a 2-month peak on Friday after U.S. economic data strengthened expectations of a rate cut by June. 

The data on manufacturing activity in the U.S. showed that production slumped, while the data on prices came in line with market expectations, causing a further decline in the Dollar and resulting in gains for the safe-haven asset.

Hence, the spark being witnessed in the domestic market this week is directly linked with the rally in the international market.

International spot gold wrapped the week at a closing rate of $2,082.73, with a gain of over $47.

As the fluctuations in the domestic exchange rate are also a key denominator of the calculated price in the domestic market, it is important to note that the Pakistani Rupee (PKR) has settled this week with a gain of around 17 paisa against USD.

Since gold is denominated in U.S. dollars when the PKR appreciates against the U.S. dollar, the value of PKR-denominated gold falls.

However, the rally in the international rates was significant enough to offset the impact of a relatively strengthened domestic unit.

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