Gold price drops by Rs1,800 per tola amid appreciation in rupee

• The rates settled at Rs121,600 per tola and Rs104,252 per 10 grams compared to Monday’s price.
• Local price of gold usually goes down on the rupee's appreciation against the US dollar.
• In the international market, the bullion price fell below $1,800.

KARACHI: Gold price edged lower on Tuesday as the rupee continued to post recovery for the second consecutive day, 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 Rs1,800 per tola to Rs121,600 and dropped by Rs1,544 per 10 grams to Rs104,252 compared to Monday’s price.

According to rates issued by All Sindh Sarafa Association, gold prices clocked in at Rs123,400 per tola and Rs105,796 per 10 grams on Monday.

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 had 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.

In the international market the bullion price fell below $1,800, the price of gold recorded a decrease of $42 per ounce to settle at $1,797 as the dollar hit 16-month highs and Treasury yields firmed, with expectations that US interest rates will rise next year shored up by the renomination of Federal Reserve Chairman Jerome Powell.