ISLAMABAD: Gold prices in the local market increased by Rs2,900 a tola on Thursday, following a surge in international bullion prices which touched a two-week high.
According to Karachi Sarafa Association, the price of one tola of 24-karat gold increased to Rs207,900 from Rs205,000. Similarly, the gold price for 10 grams of 24-karat increased to Rs178,240 from Rs175,754, with an uptick of Rs2,486.
It is important to mention that in a bid to enhance transparency within the gold market, the State Bank of Pakistan has now authorised all gold dealers to calculate domestic bullion rates using the interbank exchange rate. Moreover, the Federal Ministry of Industries and Production has established a 15-member advisory council that will review existing policies related to the gold trade, standards, certification, and value addition.
On the other hand, as of 1230 hours GMT, gold futures in the international market were available at $1,881.80 per ounce, showing an increase of $7.80. Out of the $7.80 increase, +$0.70 was due to weakening of the US dollar and +$7.10 was due to predominant buyers, according to the Kitco Gold Index.
Gold price clung to gains backed by a correction in the US dollar and treasury yields, which went down due to falling expectations of one more interest rate increase from the Federal Reserve. The precious metal registered a fresh two-week high and is gathering strength for further upside. The yellow metal climbs above the 20-day Exponential Moving Average (EMA) around $1,872, which indicates that the short-term trend has turned bullish.
While the majority of Federal Reserve policymakers favoured an additional interest rate hike ahead as per FOMC minutes, rising long-term Treasury yields have forced them to support keeping interest rates steady. Higher bond yields are expected to slow down the pace of spending and investment. At this point of time, when inflation is consistently falling and Middle East tensions are deepening, risks of under-tightening would be lower than the consequences of tightening too much. – TLTP