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Thursday Aug 06 2020
By
Web Desk

Gold rates in Pakistan continue rallying, eyeing Rs130,000-a-tola mark

By
Web Desk
Gold prices in the international markets went up $9 an ounce to $2,050. REUTERS/Michael Dalder/Files

KARACHI: Gold rates rose Rs800 per tola on Thursday, the All Sindh Sarafa and Jewellers Association (ASSJA) said, with prices around the world shooting up as well after recording a historic high yesterday amid economic woes and resurgence in coronavirus cases keeping investors concerned.

With the latest bump in rates, gold is now priced at Rs129,500 per tola. Similarly, gold rate for 10 grammes climbed Rs685 to reach Rs111,025, according to the ASSJA.

On the other hand, gold prices in the international markets went up $9 an ounce to $2,050.

Read more: Gold rates in Pakistan surge to historic high, clocking in at Rs128,700 a tola

Many analysts around the world predict more gains in gold after the speed at which the yellow metal broke through $2,000-an-ounce mark, leaving some in the market fearing a correction as the coronavirus crisis spurs investors to buying into bullion’s relative safety.

Fragile economic recovery hopes

It has risen $500 this year, and $200 in the last two weeks alone. Taking out the totemic $2,000 barrier means investors must change their reference points, said Frederic Panizzutti at Swiss precious metals dealers MKS.

“The adjustment will be higher. We are definitely in a bull run,” he said.

The precious metal extended its record-breaking run on Thursday driven by expectations of more monetary response as surging virus cases continue to pummel the US economy.

Spot gold hit an all-time high of $2,069.21 per ounce and was up 1% at $2,059.45 at 11:02am EDT (3:02pm GMT). US gold futures also rose 1%, to $2,069.40.

'A very long way to go'

“There are mixed signals that the economy is recovering and some of the signs of recovery are relatively superficial as they show aggregate figures and not how medium and small enterprises continue to suffer,” said Jeffrey Christian, managing partner of CPM Group.

“We have a very long way to go before we see a proper economic recovery.”

Data showed US jobless claims fell last week, but a staggering 31.3 million people were receiving unemployment checks in mid-July, as new infections battered the economy.

Related: How has the world responded to coronavirus pandemic through gold reserves?

Gold has rallied over 35% this year as it is considered an asset that should hold its value while the pandemic and money printing by central banks erode the value of others.

The hoarding spree has further fuelled the rally, with investors adding 922 tonnes of gold worth $60 billion at current prices to their stockpiles in exchange-traded funds this year, according to the World Gold Council (WGC).

Markets awaited further policy response as US Democratic leaders and White House officials continued their talks to try hash out a next wave of relief to help the economy.

Gold 'short-term overbought'

Silver prices jumped 4.1% to $28.12 per ounce, having hit a more than 7-year peak of $28.42, helped by a combination of investment and industrial demand.

“While there are no early chart clues to suggest the gold and silver markets are close to major tops, both are now getting short-term overbought, technically, and are due for downside corrections in the uptrends,” Kitco Metals senior analyst Jim Wyckoff said in a note.

“And remember that with the higher volatility and bigger daily price gains seen at present, there will also be bigger downside corrections when they come.”

Platinum rose 1% to $977.22 per ounce and palladium climbed 1.4% to $2,212.92.

-With additional input from Reuters.