Gold extends losses as rupee rebounds

• Bullion rates in Pakistan record a decrease of Rs500 per tola to close at Rs111,500 on Wednesday.
• The prices of gold in Pakistan are around Rs4,000 below cost compared to the gold rate in the Dubai market.
• Silver prices remain stable at Rs1,430 per tola and Rs1,226 per 10 grams on Wednesday.

KARACHI: Gold edged lower on Wednesday as the rupee rebounded after two days of losses, with the yellow metal remaining under pressure from expectations that the global recovery phase will help stocks and currency stay firm.

The rates went down by Rs500 per tola to Rs111,500 and dropped by Rs429 per 10 grams to Rs95,593 compared to Tuesday's prices.

According to rates issued by All Sindh Sarafa Association, gold prices clocked in at Rs112,000 per tola and Rs96,022 per 10 grams on Tuesday (September 7).

The association determines local prices based on rupee-dollar parity and international rates. According to the market practice, local prices of gold usually go down on the rupee's appreciation against the US dollar and rising prices of commodities in the international market.

A firmer tone to economic data and strengthening currency would undermine support for gold, which has benefited in recent times from the plunge in local currency.

Earlier, speaking to Geo.tv, AA Commodities Director Adnan Agar said: “As the US dollar has started to gain momentum against the world currencies, gold prices have started declining.”

Shedding light on the overall gold market performance during the period of January to August, the analyst had said that the safe-haven asset has lost its charm.

“Investors are now attracted towards bitcoin as it has more fluctuations, consequently the return is immediate and more as compared to gold, which is now considered as an old-investment tool,” Agar added.

The analyst had predicted the gold market to remain lacklustre for the next four months of the calendar year 2021.

"Gold will trade in a range of $1,600-1,800 till December,” he had stated.

The international gold price fell by $12 per ounce to $1,800 on Wednesday.

However, it is pertinent to mention that the gold rates in Pakistan are around Rs4,000 below cost compared to the gold rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,430 per tola and Rs1,226 per 10 grams on Wednesday.