October 15, 2023 (MLN): After witnessing continuous fluctuations, domestic bullion closed the week with a gain of Rs2,500 per tola or 1.25% driven by the uptick in international gold prices.

According to the Karachi Sarafa Association, the price of 24-Karat gold was quoted at Rs202,000 per tola at the close of the week.

The bullion market finally reopened this week after remaining closed for consecutive 27 days.

The prolonged closure was influenced by the pressure resulting from the general public's rush to acquire gold at lower rates due to the declining value of the dollar.

The surge in gold transactions led the authorities to crack down against gold dealers, causing panic in the bullion market.

Consequently, the bullion traders did not release official rates, even though some players were operating in the domestic market through hidden channels.

It is noteworthy that before the bullion's closing period, 24-Karat gold, which had neared its all-time high of Rs239,800 per tola at the end of August, fell to Rs212,000 per tola amid the appreciation of the domestic currency.

The pressure resulting from the strengthening of the Pakistani Rupee (PKR) still lingers over the gold market.

The domestic currency gained over 5 rupees against the U.S dollar in this week, marking 27 consecutive trading sessions of gains.

Gold is denominated in U.S. dollars, hence when the PKR strengthens against the USD, the value of PKR-denominated gold falls.

To note, the strengthening of the local currency is attributed to the ongoing army-backed crackdown to restrict illegal dollar outflows, along with other administrative measures taken by the government.

However, despite the local currency's rise and the prevailing pressures, the significant increase in international gold prices ultimately led to a net gain for 24-Karat gold over the course of the week.

International spot gold experienced its strongest week in seven months, closing at $1,932.37, with a gain of over $100 or 5.5% amidst the Israel-Palestine conflict. This conflict prompted investors to seek refuge in safe-haven assets.

Meanwhile, international silver price surged by 5.14%, closing the week at $22.7.

On the domestic front, the price of silver remained unchanged, with 24-karat and 10-gram 24-karat silver closing the week at Rs2,500 and Rs2,143 respectively.

Initiatives implemented by the government

The domestic government is taking significant steps to ensure integrity and prosperity in the gem market.

The State Bank of Pakistan (SBP) has authorized all gold dealers to calculate domestic bullion rates using the interbank exchange rate.

Additionally, the Federal Ministry of Industries and Production has established a 15-member advisory council to review existing policies related to the gold trade, standards, certification, and value addition.

The Karachi Sarafa Association has reaffirmed its commitment to determining gold rates based on interbank exchange rates, demonstrating a concerted effort to uphold transparency and reliability in the market.

Copyright Mettis Link News

Posted on: 2023-10-15T16:23:36+05:00