Gold price extends gains in Pakistan

By
Business Desk
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An undated image of a goldsmith showing gold bangles. — Reuters/File
An undated image of a goldsmith showing gold bangles. — Reuters/File

  • Gold price settles at Rs199,200 per tola.
  • Rates increase as rupee resume its downtrend.
  • Silver price in domestic market remain unchanged.


Gold prices extended gains on Monday as the rupee resumed its downtrend over concerns regarding Pakistan's external financing and delay in the revival of the International Monetary Fund (IMF) programme.

Data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of gold (24 carats) increased by Rs500 per tola and Rs428 per 10 grams to settle at Rs199,200 and Rs170,782.

The Pakistani currency lost Re0.84, or 0.30%, against the US dollar in the interbank market which pushed the price of gold in the local bullion market upwards.

Recent events show that gold remains a safe haven asset as it is able to benefit from market uncertainty. 

Cumulatively, the yellow metal had shed Rs1,300 per tola during the last week — and it had only registered gains twice as the movement of Pakistani currency remains volatile.

Meanwhile, silver prices in the domestic market remained unchanged at Rs2,120 per tola and Rs1,817.55 per 10 grams, respectively.

In the international market, gold raced towards the key $1,900 level, emboldened by bets that the Federal Reserve may now have to tone down its rate hikes as investors sought cover from uncertainty triggered by the collapse of Silicon Valley Bank. 

The per ounce of gold settled at $1,886 after an increase of $20.

Market participants pricing out rate hike expectations are lifting gold, said UBS analyst Giovanni Staunovo. Lower interest rates decrease the opportunity cost of holding zero-yield gold.

Gold gaining tells us that some institutional money came into the market. If we will see this trend in exchange-traded funds (ETFs) is not certain yet, said Philip Newman at consultants Metals Focus.

The yellow metal found further tailwinds from the simultaneous retreat in the dollar index, which made bullion cheaper for overseas buyers.