Gold price in Pakistan drops Rs500 per tola

May 28, 2024 (MLN): After breaking its five-day downward streak yesterday, gold price in Pakistan has once again entered the red zone, with the price of 24-karat gold dropping by Rs500 to Rs240,300 per tola today.

Gold rates were on the spike due to a massive rally in the international market, this prompted gold dealers to underprice the yellow metal by Rs4,000 due to a significant reduction in purchasing power.

However, rates are now being quoted based on the transparent international rate, incorporating the effect of changes in the exchange rate, due to the massive drop last week.

The Karachi Sarafa Association reported the price of 24-karat gold at Rs206,018 per 10-gram, down by Rs429.

Similarly, the price of 22-karat gold was quoted lower at Rs188,850 per 10-gram.

Moreover, silver prices remained unchanged in the domestic market, with 24-karat silver being sold at Rs2,800 per tola and Rs2,400.54 per 10-gram.

International gold is currently trading at $2,345.04, 0.27% lower compared to the previous close.

Investors are assessing the diminishing bets of U.S. interest rate cuts ahead of a key inflation report due later in the week.

Last week, the Federal Reserve's most recent policy minutes of the meeting indicated officials would keep interest rates higher for longer as they struggle to bring inflation down to target.

This turns out to be bearish for the yellow metal, as in an environment of higher interest rates, gold loses its attractiveness due to the rising opportunity cost of holding it.

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