Domestic gold inches closer to all-time high

August 30, 2023 (MLN): Domestic bullion continued the upward trajectory on Wednesday, with 24-karat gold appreciating by Rs2,900 to close at Rs236,400 per tola.

According to the Karachi Sarafa Association, the price of 10-gram 24-karat gold reached Rs202,675 per tola, rising by Rs2,486.

Similarly, the price of 10-gram 22-karat gold was quoted at Rs185,785 per tola, witnessing an increase of Rs2,279.

Market sentiments remain subdued as the Pakistani Rupee (PKR) continues its downward trajectory, reaching yet another all-time low of 304.45 against the US Dollar.

In just this month alone, PKR has lost 5.85% of its value against the US Dollar, while the gap between the open market and interbank exchange rates continues to grow.

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

On the other hand, the price of silver remained unchanged in the domestic market, with 24-karat silver closing at Rs2,850 per tola and the price of 10-gram 24-karat silver setting at Rs2,443 per tola.

On the global front, international spot gold is currently trading at $1,944.79, up by 0.33% compared to the previous close.

Gold was perched atop a three-week high on Wednesday as traders positioned for more U.S. economic readings that could further alter the odds of another interest rate hike by the Federal Reserve, as Reuters reported.

U.S. job openings dropped in July to approach pre-pandemic levels, raising hopes that the Fed could lower inflation without a sharp rise in unemployment.

“The chances of another rate hike before the end of the year dropped ... and this caused a drop in U.S. Treasury yields and also in the U.S. dollar,” said ActivTrades senior analyst Ricardo Evangelista.

“Bad news for the economy will be good news for gold,” he added.

Benchmark 10-year yields came off their lowest in more than two weeks, while the dollar hovered near lows hit during its worst session since Aug. 4 on Tuesday.

Meanwhile, international spot silver is currently trading at $24.79, increasing by 0.41% on the day.

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