August 11, 2024 (MLN): Despite a rough start, Pakistan’s gold market managed to close the week relatively stable, regardless of the downturn in international gold rates.
24-karat gold, the key benchmark of the local market settled at Rs256,500 per tola, just a meager Rs300 per tola lower compared to the previous week’s closing rate.
Reflecting on the past week, it is worth noting that gold rates rallied to a new all-time high following a global surge and a relatively weaker local currency.
However, apart from the drop in global rates, a worsening condition reemerged for the local gold rate this week, as weak purchasing power in the country caused dealers to underprice rates by Rs2,000 per tola.
Undercosting was last seen before July when gold dealers were forced to lower the prices.
With prices trading near their all-time highs, the commodity is becoming less affordable for the majority of consumers, putting pressure once again on dealers.
On the global front, international spot gold wrapped the week at $2,431.37, down by $11.23 or 0.46% per ounce.
Last week's weak U.S. labor data, Japan's surprise interest rate hike, and rising tensions in the Middle East triggered a global sell-off on Monday as it sparked fears of global recession.
This marked the worst performance for various indexes across the globe in a significant period.
Even gold, which is typically considered a safe haven asset in an environment of uncertainty was caught in the global downstream as it fell by over 1.3%.
Later on, majority of the indexes rebounded as the market’s attention shifted over a larger margin cut by the U.S. Federal Reserve, which somewhat improved prospects.
The U.S. Jobless Claims, which measures the number of individuals who filed for unemployment insurance in the past week fell to 233,000, a higher-than-expected drop.
Moreover, supporting the buy-side shift in markets, the Bank of Japan (BoJ)'s Deputy Governor said on Wednesday the central bank will not raise interest rates when financial markets are unstable.
Regardless, the yellow metal faced a red weekly closing as the initial decline was significant.
On the currency front, the Pakistani Rupee (PKR) continued to demonstrate stability against the US Dollar this week.
The home currency registered a meager loss of 5 paisa against the mighty Dollar, allowing rates to be directly influenced by changes in international prices and remain shielded from currency fluctuations.
Since gold is denominated in U.S. Dollar terms, when PKR depreciates against the greenback, the value of PKR-denominated gold rises and vice versa.
Copyright Mettis Link News
Posted on: 2024-08-11T15:52:51+05:00
