Monday Sep 19 2022

Gold pulls back in local market as caution sets in

Gold bullion is displayed at GoldSilver Centrals office in Singapore June 19, 2017. — Reuters/File
Gold bullion is displayed at GoldSilver Central's office in Singapore June 19, 2017. — Reuters/File

  • Gold price settles at Rs154,700 per tola.
  • Local market is expected to trade sideways during the week. 
  • Silver prices in domestic market remained unchanged.

KARACHI: Gold prices slipped in Pakistan as the dollar ticked up in the international market and investors showed caution in the run-up to the announcement of US monetary policy announcement later this week.

The precious metal plunged Rs1,500 per tola and Rs1,286 per 10 grams to settle at Rs154,700 and Rs132,630 respectively, data released by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed.

For several sessions, gold has been stuck in a range and is likely going to continue to be in that range in the near term. The market will only break out into a direction after it gets more economic data and sees stability in rupee-dollar parity.

Local market is expected to see some choppy, sideways trade this week. Speaking to AA Commodities Director Adnan Agar said that the prices may decline further in the local market in line with the international prices; however, rupee depreciation will arrest some of the losses

Moreover, rising geopolitical and economic risks are doing little to entice haven buying, with the US dollar still the asset of choice.

In the international market, the price of yellow metal rose by $13 per ounce; however, it failed to cross the psychological barrier of $1,700. The price settled at $1,662 as investors braced for aggressive interest rate hikes by the US Federal Reserve and other central banks this week in an effort to tame high inflation.

The yellow metal is viewed as a safe-haven investment in the face of inflation woes, but high-interest rates increase

Gold rates in Pakistan are around Rs1,000 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,570 per tola and Rs1,346.02 per 10 grams.