Gold prices soar Rs3,100 to close at Rs229,900 per tola

August 22, 2023 (MLN): Domestic bullion continued its climb on Monday, with 24-karat gold appreciating significantly by Rs3,100 to close at Rs229,900 per tola.

The Karachi Sarafa Association, a reputable jeweler in the precious metals market, reported that the price of 10-gram 24-karat gold settled at Rs197,102 per tola, reflecting a rise of Rs2,658.

While 10-gram 22-karat gold stood at Rs180,677 per tola.

The appreciation can be attributed to the weakening of the Pakistani rupee (PKR), as the local unit is hovering around an all-time low against the USD

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

Meanwhile, the price of silver remained unchanged in the domestic market, with 24-karat silver closing at Rs2,800 per tola and the price of 10-gram 24-karat silver settling at Rs2,800 per tola.

On the global front, international spot gold is currently trading at $1,900, up by 0.27% on the day.

Following a week of back-to-back losses, gold on Monday settled 0.3% higher to post its best day in more than two weeks, as Reuters reported.

“Potential buyers have been waiting to see how far gold could fall, and this could be the beginnings of their re-entering the market in force,” said Clifford Bennett, chief economist at ACY Securities.

Any correction in the U.S. dollar from recent highs could immediately ignite a strong gold market rally, he said.

The yield on 10-year Treasury notes hit highs last seen in November 2007 as a resilient U.S. economy boosted the view that the Federal Reserve will keep interest rates higher for longer. 

Higher rates increase bond yields and boost the dollar, making non-yielding bullion less attractive.

Meanwhile, international spot silver is currently trading at $23.34, increasing by 0.12% on the day.

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