Gold price in Pakistan surges by Rs2,600 per tola

November 29, 2023 (MLN): Domestic bullion recorded significant gains on Wednesday as the price of 24-karat gold surged by Rs2,600 per tola to Rs221,000 per tola.

The Karachi Sarafa Association reported that the price of 10-gram 24-karat gold closed today’s session at Rs189,472 reflecting a gain of Rs2,229.

While 10-gram 22-karat gold stood at Rs173,683, up by Rs2,676.

The price of silver remained unchanged in the domestic market, with 24-karat silver and 10-gram 24-karat silver closing at Rs2,620 and Rs2,246.21 respectively.

The surge in domestic gold prices is attributed to a substantial increase in international prices.

On the global front, international gold price rose for the fourth consecutive session, reaching a more than six-month high.

The international spot gold is currently trading at $2,041.61, up by 0.05% on the day.

The market's expectations that the Federal Reserve has reached the end of its tightening cycle continue to enforce pressure on the dollar and U.S. bond yields, resulting in benefits for international prices.

The U.S. Dollar Index (DXY), which tracks the value of the greenback against six other top currencies is on track to mark its fifth consecutive decline.

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

Likewise, falling yields also benefit the metal as they reduce the opportunity cost of holding the safe-haven asset.     

On the currency front, so far in today's intraday trade, the local currency has appreciated against the U.S. Dollar, compared to its previous closing rate of PKR 285.52 per USD.

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

However, the impact of the rise in international prices outshined the effect of appreciation on the domestic gold prices in today's session.

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