Gold pulls back as rupee strengthens, caution sets in

• Bullion rates in Pakistan record a decrease of Rs900 per tola to close at Rs112,700 on Thursday.
• The prices of gold in Pakistan are around Rs3,000 below cost compared to the gold rate in the Dubai market.
• Silver prices remain stable at Rs1,410 per tola and Rs1,208 per 10 gram on Thursday.

KARACHI: Gold prices slipped on Thursday as the rupee ticked up from its lows and investors showed caution in the run-up to the announcement of a monetary policy next week.

The yellow metal lost around Rs900 to settle at Rs112,700 per tola and Rs772 to fall to Rs96,622 per 10 grams in the domestic market.

The rupee index inched 0.56% higher, owing to the suspected dollar selling by the central bank.

On the international front, gold prices drifted lower, with a firmer dollar and US bond yields diminishing its appeal, as investors turned their attention to next week’s US Federal Reserve meeting for clues on when it will begin tapering its stimulus.

The international gold price fell by $24 per ounce to $1,779.

Earlier, speaking to Geo.tv, a gold dealer Abdullah Abdul Razak Chand had said that the overall demand for the precious commodity is low because of Muharram and Safar. “Moreover, the customers lack purchasing power,” he had mentioned.

However, the dealer remained hopeful that as the government has now allowed markets to remain open till 10pm and has eased other COVID-related restrictions, the gold market will perform better.

It is pertinent to mention that the gold rates in Pakistan are around Rs3,000 below cost compared to the gold rate in the Dubai market.

Meanwhile, silver prices remained unchanged in the domestic market at Rs1,410 per tola and Rs1,208 per 10 grams on Thursday.

— With additional input from Reuters