Saturday Mar 26, 2022
KARACHI: Gold ended the week with an increase of Rs450 per tola to settle at Rs131,900.
Meanwhile, the price of the precious commodity rose by Rs386 per 10 grams to settle at Rs113,083, respectively.
Cumulatively, the safe-haven asset gained Rs1,900 per tola during the week as gold is considered a safe store of value during times of political crisis and uncertainty.
Gold rates in Pakistan are around Rs6,000 below the cost compared to the rate in the Dubai market.
Meanwhile, silver prices in the domestic market remained unchanged at Rs1,510 per tola and Rs1,294.58 per 10 grams today.
Gold was on course to gain for the week as concerns over the war in Ukraine and rising prices boosted its appeal as a safe-haven and an inflation hedge, but prices eased as US Treasury yields reached new highs.
It gained $3 per ounce to settle at $1,958.
Helped by expectations of monetary tightening by the US Federal Reserve, yields on the US 10-year Treasury note firmed near multi-year highs, increasing the opportunity cost of holding zero-yield bullion.
"If interest rates do continue to rise at a quick pace, that could limit the upside in precious metals," said Chris Gaffney, president of world markets at TIAA Bank.
"However, the overall tone of the market is still supportive of precious metals. There is safe-haven buying and also an inflation hedge on the retail side. We're seeing clients coming in wanting to add the diversification of gold to their portfolios," Gaffney said.
The Fed raised borrowing costs for the first time in three years last week, and traders are pricing in a probability of a 50 basis points rate hike during the Fed policy meeting in May.
— With additional input from Reuters