Bullion market suffers as 24-karat gold drops by another Rs1,800 per tola

December 12, 2023 (MLN): Domestic bullion extended its decline on Tuesday as the price of 24-karat gold fell by Rs1,800 to settle at Rs213,600 per tola.

The Karachi Sarafa Association reported that the price of 10-gram 24-karat gold closed today’s session at Rs183,128, reflecting a loss of Rs1,543.

While 10-gram 22-karat gold stood at Rs167,867, down by Rs1,415.

It is crucial to mention that gold investors in the domestic bullion market experienced a major setback last week as the price of 24-karat gold plunged by Rs8,000 per tola, driven by a significant decline in international prices and a strengthened local unit.

Meanwhile, the price of silver remained unchanged in the domestic market today, with 24-karat silver and 10-gram 24-karat silver closing at Rs 2,600 and Rs 2,229.08, respectively.

The decline in the local market today is attributed to the falling prices in the international market.

International spot gold is down 1.04% this week, currently at $1,994.46, due to pressure arising from the strengthened dollar and US treasury yields.

This marks the second consecutive session in which the commodity has traded in the red zone.

Market participants are now awaiting the U.S. consumer price report scheduled for 05:30pm PST today, which could provide more information about potential rate cuts ahead of the Fed's statement and Chair Jerome Powell's comments on Wednesday.

In the domestic market, gold prices are also influenced by fluctuations in the local exchange rate.

The Pakistani rupee (PKR) maintained stability during yesterday's interbank session to settle at PKR 283.9 per USD, compared to the previous session's closing of PKR 283.87 per USD, reflecting a marginal depreciation of around 3 paisa against the US dollar.

Since gold is denominated in U.S. dollars, when the local unit strengthens against the greenback, the value of PKR-denominated gold falls.

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