Gold price extends gains in Pakistan

• Gold prices in the local bullion market records an increase of Rs600 per tola to settle at Rs124,600.
• Adnan Agar says price of gold in the local market is completely dependent on two factors.
• Bullion rates in Pakistan are around Rs4,000 below cost compared to the gold rate in the Dubai market.

KARACHI: Gold price in Pakistan rose on Friday boosted by concerns regarding uncertain rupee-dollar parity, which have once again sparked a flight from risky commodities towards safer ones.

Gold prices in the local bullion market recorded an increase of Rs600 per tola and Rs514 per 10 grams to settle at Rs124,600 per tola and Rs106,824 per 10 grams.

On Thursday, the yellow metal closed at Rs124,000 per tola and Rs106,310 per 10 grams.

The precious commodity had lost around Rs7,100 per tola during the period of November 12-17 on the back of concerns that the State Bank will raise its benchmark interest rates.

Speaking to Geo.tv, AA Commodities Director Adnan Agar said that the price of gold in the local market is completely dependent on two factors.

“Currency movement and international price changes have a significant impact on the price of the precious commodity in Pakistan,” he elaborated.

Meanwhile, the precious metal was flat in the international market, as traders were caught between concerns over broadening inflationary risks and the prospects of quicker interest rate hikes, which challenged bullion's appeal as an inflation hedge.

It recorded a meagre loss of $2 per ounce to settle around $1,858.

"While elevated inflation has enticed strong buying interest in gold, expectations of policy normalisation by the US Fed and other major central banks amid a sharp recovery in growth remains the key headwind for the metal," said Sugandha Sachdeva, vice president of commodity and currency research at Religare Broking.

"Gold prices are likely to consolidate in a range between $1,835 and $1,880 in the short-term. But in the long term, the metal is likely to witness buying interest at lower levels and if prices nudge past $1,880, it could surge to $1,920."

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

Furthermore, silver price in the domestic market remained unchanged at Rs1,440 per tola and Rs1,234.56 per 10 grams today.

— With additional input from Reuters