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Weeklong Boom: 24-karat gold jumps Rs7,100 per tola

Domestic gold ends 2-week losing streak
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December 02, 2023 (MLN): Gold price in Pakistan witnessed a remarkable surge this week as the price of 24-karat gold soared by Rs7,100 per tola to Rs223,600 per tola.

In today’s session alone, the price of gold in the local market increased by Rs3,100 per tola.

The Karachi Sarafa Association reported that the price of 10-gram 24-karat gold closed today’s session at Rs191,701 reflecting a gain of Rs2,658.

While 10-gram 22-karat gold stood at Rs175,726, up by Rs2,436.

The price of silver remained unchanged in the domestic market, with 24-karat silver and 10-gram 24-karat silver closing at Rs2,620 and Rs2,246.21 respectively.

It is important to mention that the 24-Karat gold closed the month of November with a gain of Rs8,000 per tola or 3.76% MoM.

The surge in domestic gold prices is attributed to a substantial increase in international prices.

International spot gold rallied to an all-time high on Friday, closing the week at $2,071.92, up by 3.49% WoW.

This marked the third consecutive weekly gain, driven by expectations that the Federal Reserve has reached the end of its tightening cycle.

Consequently, the U.S. dollar and bond yields remained under pressure, resulting in favorable outcomes for international prices.

The U.S. Dollar Index (DXY), which tracks the value of the greenback against six other top currencies fell for the third straight week.

Moreover, the 10-year U.S. government bond yield dropped to 4.197% in contrast to the rate of 4.472% at the close of the preceding week.

A weaker dollar makes gold more affordable for holders of other currencies, exerting a positive impact on gold prices.

Likewise, falling yields also benefit the metal as they reduce the opportunity cost of holding the safe-haven asset.

On the currency front, the Pakistani Rupee (PKR) closed the week at PKR 284.97 per USD, reflecting an appreciation of around 41 paisa.

This upswing is attributed to the successful staff-level agreement (SLA) between the International Monetary Fund (IMF) and Pakistani authorities during the first review under the Stand-By Arrangement (SBA).

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

However, the impact of the rise in international prices outshined the effect of appreciation of the local unit, ultimately resulting in a positive impact on domestic gold prices this week.

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Posted on: 2023-12-02T20:20:43+05:00