On Friday, gold prices in Pakistan saw a modest increase, with the price of 24-karat gold rising by Rs500 to reach Rs241,700 per tola. This increase comes amidst a backdrop of reduced purchasing power, which has kept the price significantly Rs3,000 below its actual cost.
The Karachi Sarafa Association reported that the price of 24-karat gold per 10-gram fell by Rs429, bringing it to Rs207,219. Meanwhile, 22-karat gold was quoted higher at Rs189,950 per 10-gram.
Silver prices remained stable, with 24-karat silver priced at Rs2,900 per tola and Rs2,486.28 per 10-gram.
Global Market Dynamics
On the global front, spot gold traded near $2,344.5 an ounce, remaining largely unchanged from the previous close. Investors are closely watching the diminishing expectations of U.S. interest rate cuts ahead of a key inflation report due later in the week.
The recent minutes from the Federal Reserve’s policy meeting indicated that officials are inclined to maintain higher interest rates for an extended period as they continue efforts to bring inflation down to target levels. This stance is typically bearish for gold, as higher interest rates increase the opportunity cost of holding non-yielding assets like gold, making it less attractive to investors.
Market Reactions and Implications
The increase in local gold prices contrasts with the stability in global markets, reflecting specific domestic factors such as reduced purchasing power and local market dynamics. As investors navigate these mixed signals, the precious metal market in Pakistan continues to react to both domestic economic conditions and international monetary policy trends.
