ISLAMABAD: Gold price in the country dropped by Rs27,300 (-11.38 percent) per tola on a week-on-week basis after surging for three straight weeks, following rupee’s appreciation against the US dollar as well as a dip in international prices.
The gold rate in Pakistan for a single tola of 24-karat on a week-on-week (WoW) basis decreased to Rs212,500 from Rs239,800, according to the data provided by All Pakistan Sarafa Gems and Jewellers Association (APSGJA).
Similarly, the gold rate for 10 grams of 24-karat dipped to Rs182,184, while the 22-karat gold rates for 10 grams went down to Rs167,002
In the preceding three weeks, the price surged by Rs8,500 (+3.63 percent), Rs6,700 (+2.95 percent) and Rs5,600 (+2.52 percent) per tola on a week-on-week basis. Prior to this, the gold price for a single tola of 24-karat in the country fell by Rs2,000 during the preceding three weeks.
It is essential to understand that the exchange rate and international market prices play a direct and influential role in shaping the prices of precious metals like gold in Pakistan. The Pakistani rupee’s appreciation against the US dollar kept the gold price lower in the country. The rupee appreciated last week by 8.68 percent in the open market and 0.82 percent in the interbank market.
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.
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.
In global markets, gold closed the week at $1,918.70 per ounce against $1,939.60 in the preceding week, showing a week-on-week decrease of $20.90 (-1.08 percent). This was the first weekly loss for gold price after it registered two consecutive weekly gains.
Gold price opened the week lower and fell for the first three days of the week. It touched the $1,915 region on Wednesday. However, it gained some positive traction on Thursday and Friday, eroding some of the loss of the week. Against the backdrop of concerns about the worsening economic conditions in China, a downward revision of Japan’s second-quarter GDP growth fuelled worries about a deeper global downturn. Apart from this, the worsening US-China relations – the world’s two largest economies – dr0ve some haven flows towards the gold price.
This came after US Secretary of Commerce Gina Raimondo’s comments earlier this week that she didsn’t expect any changes to the US tariffs imposed on China by the Trump administration until the ongoing review by the US Treasury is complete. The developments continue to weigh on investors’ sentiment, which was evident from the prevalent cautious mood around the equity markets. Apart from this, a modest US dollar weakness was seen lending additional support to the gold price. – TLTP