Tuesday Mar 28, 2023
Gold prices on Tuesday regained ground, climbing above the key Rs205,000 level as the rupee closed flat against the US dollar in the interbank market amid lack of clarity on the economic front owing to the 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) rose by Rs1,000 per tola and Rs857 per 10 grams to settle at Rs205,600 and Rs176,268.
Gold price moves in line with the rupee-dollar parity as the country meets almost all its gold demand through imports, and traders follow its international price in setting rates in the country.
Jewellers import the metal against the US dollar and UAE dirham before converting its price into rupees.
The association also mentioned that the price of gold is Rs10,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.
Meanwhile, silver prices in the domestic market remained unchanged at Rs2,250 per tola and Rs1,929 per 10 grams, respectively.
In the international market, gold prices steadied, recouping earlier losses on a softer dollar, while investors favoured higher-risk assets as banking worries eased and pushed bullion further away from the $2000 mark it reached last week.
The per-ounce price settled at $1,957 after an increase of $7.
In the near-term, gold prices could slip to $1,933, but the outlook for gold remains bullish with a fast-approaching peak in US rates and danger of hitting a recession in coming months, said Ole Hansen, head of the commodity strategy at Saxo Bank.
Gold has been closely tracking the changing expectations regarding Fed policy, economists at Barclays wrote in a note.
"If inflation drops sharply but central banks are reluctant to immediately lower rates in response to it, this could be detrimental" to gold, they wrote.
— Additional input from Reuters