Domestic bullion maintains upward trajectory, settles at Rs234,500 per tola
MG News | August 22, 2023 at 05:26 PM GMT+05:00
August 22, 2023 (MLN): Domestic bullion continued the upward trajectory on Tuesday, with 24-karat gold appreciating significantly by Rs4,600 to close at Rs234,500 per tola.
The Karachi Sarafa Association, a reputable jeweler in the precious metals market, reported that the price of 10-gram 24-karat gold settled at Rs201,046 per tola to reflect a rise of Rs3,944.
While 10-gram 22-karat gold stood at Rs184,292 per tola, appreciating by Rs3,615 as compared to the previous close.
The appreciation can be attributed to the weakening of the Pakistani rupee (PKR), as the local unit plunged to its historic low of 299 against the USD.
Since gold is denominated in U.S. dollars when the PKR depreciates against the U.S. dollar, the value of PKR-denominated gold rises.
Furthermore, political uncertainty surrounding the general elections is also causing turbulence in local markets. Consequently, investors might be preferring safe-haven assets like gold.
It is worth mentioning that gold price has risen for 5 consecutive trading sessions and is currently up by Rs7,700 per tola this week.
Meanwhile, the price of silver remained unchanged in the domestic market, with 24-karat silver closing at Rs2,800 per tola and the price of 10-gram 24-karat silver settling at Rs2,800 per tola.
On the global front, international spot gold is currently trading at $1,901.76, up by 0.72% compared to the previous close.
“At the moment I think it’s nothing more than a little bit of dollar correction and bargain hunting at these levels that is helping gold prices,” said independent analyst Ross Norman, as Reuters reported.
“We are not expected to see significant moves in gold leading up to Jackson Hole because people will be waiting on the sidelines. But the elephant in the room continues to be U.S. Treasury yields, which are at a 16-year high.”
The dollar fell 0.2% against its rivals, making gold less expensive for holders of other currencies, while benchmark 10-year U.S. Treasury yields retreated after hitting levels not seen since November 2007.
Focus now shifts to European Central Bank President Christine Lagarde and Federal Reverse Chair Jerome Powell at Jackson Hole later this week for a read on the interest rate outlook.
Higher rates increase bond yields, making non-yielding bullion less attractive.
Meanwhile, international spot silver is currently trading at $23.36, rising by 0.19% on the day.
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