Gold price surges by Rs1,100 per tola to Rs217,600

November 27, 2023 (MLN): Domestic bullion started the week strong with the price of 24-karat gold surging by Rs1,100 per tola to Rs217,600 per tola.

The Karachi Sarafa Association reported that the price of 10-gram 24-karat gold closed today’s session at Rs186,557 reflecting a gain of Rs943.

While 10-gram 22-karat gold stood at Rs171,010, up by Rs864.

It is important to mention that the gold price in the country rose by Rs1,400 per tola last week due to the upturn in international prices.

The price of silver also experienced an uptick in the domestic market, with 24-karat silver and 10-gram 24-karat silver closing at Rs2,550 and Rs2,186.21, marking gains of Rs70 and Rs60, respectively.

Domestic gold prices are influenced by changes in international prices and fluctuations in the local currency's interbank exchange rate.

On the global front, international spot gold is up by 0.50% on the day and is currently trading at $2,012.39.

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 marked its third consecutive weekly drop last week.

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 285.37 per USD.

Moreover, the local marked its second consecutive weekly win against the greenback last week, appreciating by 1.13 rupees.

This upswing follows the successful staff-level agreement (SLA) between the International Monetary Fund (IMF) and authorities during the first review under the Stand-By Arrangement (SBA)

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.

Copyright Mettis Link News