Thursday, October 06, 2022

Gold pares losses on strengthening rupee, price plunges by Rs3,400 per tola

Rupee's strength is hurting gold even though precious metal was regaining shine in international market

A representational image of a gold shop. — Reuters/File
A representational image of a gold shop. — Reuters/File

  • Gold price settles at Rs144,900 per tola.
  • Rupee's strength is hurting gold.
  • Silver prices in domestic market remain unchanged.

KARACHI: Gold pared some losses on Thursday after the Pakistani rupee continued to register significant gains against the US dollar, some investors unwound safe-haven positions as the price of the precious metal fell below the key level of Rs145,000.

Data released by All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the gold price plunged by Rs3,400 per tola and Rs2,915 per 10 grams to settle at Rs144,900 per tola and Rs124,228 per 10 grams, respectively.

Investors are still nervous ahead of the monetary policy announcement on how aggressive the State Bank of Pakistan (SBP) will be.

The rupee's strength was hurting gold even though the precious metal was regaining shine in the international market.

Investors, who were awaiting September's inflation data to gauge its likely impact on the SBP’s rate hike plans, are now eyeing the MPC’s decision due on Monday (October 10).

Gold is considered a hedge against inflation and economic uncertainties. However, it is highly sensitive to rising interest rates, which raise the opportunity cost of holding non-interest-bearing bullion.

In the international market, the price of the yellow metal rose by $3 to firm above the key $1,700 per ounce level. The price settled at $1,712.

Gold rates in Pakistan are around Rs3,000 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,620 per tola and Rs1,388.88 per 10 grams.