Gold prices drop by Rs1,500 per tola to Rs233,000

August 28, 2023 (MLN): Domestic bullion started the week on a low note with 24-karat gold witnessing a decline of Rs1,500 to close at Rs233,000.

As per the Karachi Sarafa Association, the cost of 10 grams of 24-karat gold was registered at Rs199,760 per tola, witnessing a Rs2,143 fall per tola.

While 10-gram 22-karat gold stood at Rs183,113 per tola, dipping by Rs1,965.

The Pakistani Rupee (PKR) continued to take a beating and settled at another all-time low of 302 per US Dollar.

Since gold is denominated in U.S. dollars when the PKR depreciates against the U.S. dollar, the value of PKR-denominated gold rises.

To note, 24-karat gold gained Rs8,700 per tola, or 3.84% last week.

Meanwhile, the price of silver remained unchanged in the domestic market, with 24-karat silver closing at Rs2,850 per tola and the price of 10-gram 24-karat silver settled at Rs2,443 per tola.

On the global front, international spot gold is currently trading at $1,992.03, up by 0.41% compared to the previous close.

Gold prices edged higher on Monday, helped by a retreat in the dollar and bond yields, while investors awaited a slew of U.S. economic data this week for more clues on interest rate outlook, as Reuters reported.

The dollar was down 0.1% against rivals, making gold less expensive for other currency holders. The benchmark 10-year Treasury yields held below the recent peak.

Focus this week will be on the U.S. personal consumption expenditures price index report due on Thursday and the August nonfarm payrolls data on Friday for more clarity on the economy’s strength.

“Strong employment, strong jobs numbers and wage numbers imply continued stress on wages and potential inflation, meaning the Federal Reserve is more likely to keep rates at high levels for a prolonged period,” Bart Melek, head of commodity strategies at TD Securities, said.

“Gold could fall back towards the $1,900 if data remains very robust, I think it’s not outside of the realm of possibilities that gold could go to $1,840,” Melek said.

International spot silver is currently trading at $24.29, marking an increase of 0.25% on the day.

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