Gold shines by Rs4,500 per tola despite hitting 6-week low globally

ISLAMABAD: Gold prices in the country surged by Rs4,500 (1.95 percent) per tola last week due to uncertainties on political and economic fronts despite a meagre 0.19 percent depreciation of Pakistani rupee against the US dollar during the period under review.
However, the yellow metal reached its lowest level in six weeks in international bullion markets, extending the correction from its record high level struck in May and notching a loss of 1.6 percent, which has been the largest weekly loss since early February. The gold futures ended the week lower to $1,977.70 against $2,010.50 per ounce a week earlier.
The gold rate in Pakistan for a single tola of 24-karat reached Rs235,300 from Rs230,800 a week earlier. Similarly, the gold rate for 10 grams of 24-karat reached Rs201,750 from Rs197,900 on a week-on-week basis, showing an increase of Rs3,850. The gold price for 22-karat was recorded at Rs215,650 against Rs213,000 per tola a week ag0. Likewise, the gold rate for 10 grams of 22-karat reached Rs184,900.
The domestic gold market has remained volatile for the last one year due to economic and political turmoil, high inflation, and currency depreciation. People prefer to buy the yellow metal in such times as a safe investment and a hedge to protect themselves against inflation and currency depreciation. The safe-haven bullion had reached an all-time high of Rs240,000 per tola on May 10 following increased political uncertainty after Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan’s arrest.
All Pakistan Sarafa Gems and Jewellers Association (APSGJA) said that local gold was overcost by Rs6,000 per tola in Pakistan compared to the Dubai bullion market. This means that, at present, the Pakistani gold market is more expensive than the world market.
Internationally, gold lost the $2,000 level last week due to a rally in the US dollar and higher US bond yields. As a result, the yellow metal reached its lowest level in six weeks. A key factor driving gold prices lower was the surge in the US 10-year bond yield, which rose for five consecutive days, climbing from 3.45 percent to 3.70 percent, the highest level in two months. This significant increase in yield weighed on gold prices. – TLTP