Gold slumps by Rs2,500 to Rs222,200 per tola

July 31, 2023 (MLN): Domestic bullion went down on Monday, with 24-karat gold reaching Rs222,200 per tola, down by Rs2,500.

It is worth noting that gold prices went down by Rs600 per tola last week as the Pakistani rupee (PKR) appreciated by 35.89 paisa or 0.13% against the US dollar.

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

As per the Karachi Sarafa Association, the cost of 10 grams of 24-karat gold was registered at Rs190,501 per tola, witnessing an Rs2,143 fall per tola.

While 10-gram 22-karat gold stood at Rs174,626 per tola.

Similarly, the price of silver rose in the domestic market, with 24-karat silver falling by Rs50 to close at Rs2,800 per tola and the price of 10-gram 24-karat silver reached Rs2,401 per tola, rising by Rs42.86

On the global front, international spot gold is currently trading at $1,958.71 rising by 2.03% on the day.

International gold was set to notch up an about 1.9% gain this month, which would be its biggest since March, as bets that U.S. interest rates could be nearing their peak put the dollar on track for a second straight monthly decline, as Reuters reported.

“We remain in a supportive scenario because there’s a recession risk and the expectation that central banks are going to be more dovish next year is the main catalyst supporting the price of gold,” said Carlo Alberto De Casa, market analyst at Kinesis Money.

Data on Friday showed annual U.S. inflation rose at its slowest pace in over two years in June, cementing expectations that the Federal Reserve was closer to ending its fastest rate hiking cycle since the 1980s.

Higher interest rates discourage the buying of non-interest-paying bullion, which is priced in dollars.

Meanwhile, international spot silver is currently trading at $24.36, surging by 6.94% on the day.

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