Gold price in Pakistan increases by Rs2,500 per tola in a week

December 24, 2023 (MLN): Gold prices in Pakistan increased this week as the price of 24-karat gold rose by Rs2,500 per tola and settled the week at Rs219,300.

The Karachi Sarafa Association reported that the price of 10-gram 24-karat gold closed Saturday's session at Rs188,014, reflecting a loss of Rs429 for the day.

While the price of 10-gram 22-karat gold stood at Rs172,347, down by Rs393.

The price of silver remained unchanged in yesterday's session, with 24-karat silver and 10-gram 24-karat silver closing at Rs2,650 and Rs 2,271.94.

It is crucial to mention that this marks the second consecutive weekly gain witnessed by the domestic bullion market owing to an uptick in international prices.

Extending its gains, international spot gold marked its second consecutive weekly increase, closing at 2,053.2 with a gain of $33.66, representing a 1.67% rise week over week.

The appreciation in international gold is attributed to a pressured dollar and U.S. Treasury yields.

The U.S. Federal Reserve's hint at a cumulative rate cut of 75 basis points in 2024 continues to exert pressure on yields and the greenback.

The U.S. Dollar Index (DXY), which tracks the value of the greenback against six other top currencies fell 0.86% WoW, extending losses from the previous week.

Similarly, the 10-year U.S. government bond yield also dropped for the second week to 3.9%, in contrast to the rate of 3.913% at the close of the preceding week.

A weaker dollar makes gold more affordable for holders of other currencies, exerting a positive impact on gold prices.

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

The Pakistani Rupee (PKR) secured its sixth straight weekly gain by appreciating around 73 paisa against the US dollar this week.

The positivity is attributed to the successful staff-level agreement (SLA) between the International Monetary Fund (IMF) and a current account surplus of $9 million recorded for November.

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

However, the domestic bullion weighed on rising international prices and outweighed the impact of a strengthened Rupee.

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