Falling gold price fails to lift local demand

KARACHI: Gold prices fell on Friday in the domestic market as a sharp recovery in rupee-dollar parity on Friday made bullion less expensive for holders of the local currency.

Gold prices in the local bullion market lost Rs2,050 per tola and Rs1,758 per 10 grams to reach Rs118,600 per tola and Rs101,680 per 10 grams.

The precious commodity closed at Rs120,650 per tola and Rs103,438 per 10 grams on Thursday.

Local dealers are, however, not satisfied with the decline in gold prices as they believe that this will not affect the demand for gold due to lack of purchasing power.

Cumulatively, the precious commodity has lost around Rs13,400 during the last three days.

According to All Sindh Saraf Jewellers Association (ASSJA), it recorded a decrease of $8 per ounce to around $1,794 in the international market.

Earlier, gold was attracting safe-haven investment because investors, who used to pour money into foreign currencies, particularly in the US dollar to avoid the impact of inflation, were buying gold because the government and the central bank have tightened regulations about the purchase of foreign currencies in the open market.

It is pertinent to mention that the gold rates in Pakistan are around Rs2,000 below cost compared to the gold rate in the Dubai market.

Meanwhile, silver prices in the domestic market recorded a decrease of Rs20 per tola and Rs17.15 per 10-gram to settle at Rs1,440 per tola and Rs1,234.56 per 10 grams.