April 21, 2024 (MLN): The domestic bullion market continued to roar as prices this week surpassed their previous record high level and reached a new peak, driven by surging rates in the international market and a relatively weaker Rupee.
24-karat gold, the primary benchmark of the local market closed the week at a peak of Rs252,200 per tola, reflecting a rise of Rs4,600 WoW.
The Karachi Sarafa Association further reported that the price of 24-karat gold reached Rs216,221 per 10-gram, up Rs3,944 WoW.
Similarly, 22-karat gold was also quoted higher at Rs198,202 per 10-gram.
Domestic gold remains shielded by the global rally, with rates spiking due to Middle East tensions and the perception of a policy shift to rate cuts.
The Middle East conflicts that began in October 2023 have generated a significant upside for the yellow metal and as these issues are escalating, they continue to exert a bullish impact.
Adding further to gains, China’s step to build its reserves of gold, a key talk of the financial market currently, is resulting in the metal breaking and setting new all-time highs.
International spot gold wrapped the week as its fifth straight weekly victory, marking its longest 7-day winning streak since January 2023.
It gained over 2% or $48 per ounce and settled at a new all-time high of $2,392.07.
Traders closely monitored developments surrounding the Middle East conflict throughout the week, following Iran’s recent recent attack of drones and missiles against Israel, taking the conflict in the region into a perilous new phase.
The yellow metal stayed within the bullish zone as the market awaited and speculated on the potential response from Israel.
Even Federal Reserve Chair Jerome Powell’s hint toward delay in rate cuts due to high inflation readings was overshadowed by investors as the war conflicts continued to add appeal to the safe haven asset.
Considering the meager downward impact of this projection, market analysts termed gold being a geopolitical trade rather than a monetary policy trade due to the current global situation.
However, local gold booked higher gains this week as the conflict-ridden situation in the Middle East spread its impact on the domestic currency.
The Pakistani rupee (PKR) depreciated by around 37 paisa WoW, closing the interbank trade of the last session at PKR 278.31 per USD, compared to the previous week's closing of PKR 277.94 per USD.
Since gold is denominated in U.S. Dollar terms, when PKR depreciates against the greenback, the value of PKR-denominated gold rises.
However, the government does not anticipate any significant currency devaluation as part of its negotiations with the International Monetary Fund to unlock billions of dollars in lending and bolster the nation’s economic reform agenda.
Copyright Mettis Link News
Posted on: 2024-04-21T20:19:33+05:00
