The price of gold in the country increased by Rs1,200 per tola, or 0.56 percent, due to a rise in the international rate. This comes after a significant drop of Rs8,000 per tola, or 3.58 percent, in the previous week. According to data from the Karachi Sarafa Association and All Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price for a single tola of 24-karat gold rose to Rs216,800 from Rs215,600, while the price for 10 grams of 24-karat gold increased to Rs185,871 from Rs184,842 at the start of the week.
The increase in the international rate also played a role in the surge of gold prices in the country, with the international rate closing at $2,040 per ounce compared to $2,024 per ounce the previous week, marking a $16 increase.
The Pakistani rupee has been gaining strength against the US dollar for the past five weeks, which has affected the price of gold in the local market. As the local unit appreciates against the greenback, the value of gold in the local market decreases if all other factors remain the same. Additionally, global gold prices remained on an upward trend during the week, leading to a relatively lower increase in the price of gold in the country.
In global markets, gold closed the week at $2,019.90 per ounce, showing a week-on-week increase of $15.40, or 0.77 percent. This increase was attributed to the Federal Reserve’s (Fed) dovish shift, as well as geopolitical risk and China’s economic woes, which validated the positive outlook.
From a technical perspective, gold prices failed to find a foothold above the key supply zone of $2,040-$2,050 on a daily closing basis. However, the 14-day Relative Strength Index (RSI) indicator is still holding above the midline, indicating continued bullish potential for gold prices.
Looking ahead, the global PMI data will provide fresh trading impetus for gold prices and a daily close above the $2,040-$2,050 region is critical to unleashing additional gold price recovery towards the $2,100 psychological level.
Additional insight: The increase in gold prices can also be attributed to investor concerns about inflation and a weakening US dollar. Geopolitical tensions and economic uncertainty also play a role in driving up the demand for gold as a safe-haven asset. Furthermore, the dovish stance of the Federal Reserve and the indication of potential rate cuts have also contributed to the positive outlook for gold prices.
