ISLAMABAD: Gold prices in the local market remained on a downward slide for the fourth session in a row and decreased massively by Rs5,800 a tola on Thursday, following appreciation of Pakistani rupee against the US dollar as well as an overnight dip in international prices.
According to the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of one tola of 24-karat gold decreased to Rs216,500 from Rs222,300, showing a decrease of Rs5,800. During the last four days, gold price has fallen by Rs23,300 a tola in the country.
Similarly, the gold price for 10 grams of 24-karat dipped to Rs185,614 from Rs190,586,depicting a decrease of Rs4,972. Following suit, the 22-karat gold rates for 10 grams went down to Rs170,146 from Rs174,704 with a decrease of Rs4,558.
Market analysts attributed the big decrease in gold prices to the ongoing depreciation in the international prices as well as appreciation of Pakistani rupee against the US dollar in the open market. The rupee appreciated by Rs6 (+1.92 percent) against the US dollar in the open market on Thursday, Rs13 (+3.99 percent) on Wednesday and Rs8 (+2.40 percent) on Tuesday last. Overall, the rupee has appreciated by Rs27 in three sessions.
Since gold is denominated in the US dollars when the local unit appreciates against the greenback, the value of gold in the local market falls. Furthermore, the local bullion was influenced by the positive news surrounding the recent meeting between Chief of Army Staff (COAS) Asim Munir and the business community. During the meeting, COAS Munir highlighted the crucial role of the Special Investment Facilitation Council (SIFC) and emphasised its potential to attract significant investments, estimated at up to $100 billion. This positive outlook may have boosted investor confidence, reducing the appeal of assets like gold.
On the other hand, as of 1255 hours GMT, gold futures in the international market were available at $1,922.40 per ounce, showing an increase of $6 (+0.31 percent). Out of the $6 increase, -$4.20 was due to strengthening of the US dollar and +$10.20 was due to predominant buyers, according to the Kitco Gold Index.
The gold price witnessed a fall in the previous session and despite a gain on Thursday, it stands at the lowest level in more than a week as market players seek additional clues to defend the previous bearish bias about the bullion.
Gold price lost its traction and dropped just above the $1,920 level following a surge in the 10-year US Treasury bond yield, which climbed toward 4.3 percent on upbeat US data, causing gold price to erode some gains of the day. The same joins fears of economic slowdown in other major countries to propel the greenback and exert downside pressure on the gold price. – TLTP