On Wednesday, the price of gold increased as bargain hunters took advantage of the recent uncertainty, but the outlook for the precious metal was still bleak due to the possibility of swift rate increases the following week.
The price of the precious metal increased by Rs 2,100 per tola and Rs 1,801 per 10 grammes, according to data supplied by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), to settle at Rs 186,500 per tola and Rs 159,894 per 10 kilos, respectively.
According to the group, the price of gold in Pakistan has been “overcost” by Rs2,000 per tola when compared to pricing in Dubai. This indicates that the price of gold in Pakistan is currently higher than it is on the global market.
It should be noted that Pakistan imports practically all of the gold it needs, and local traders fix their prices in accordance with worldwide market rates. The metal is imported by jewellers, who first exchange its value into US dollars and UAE dirhams.
The majority of the buyers in the local market these days are investors in gold, according to goldsmiths. In the past, people kept their money in US dollars to protect them from the effects of the rupee’s devaluation during a period of high inflation.
The precious metal had corrections during the first three sessions of last week’s gold price volatility, but it later regained its lustre. The price increased by Rs2,000 over the turbulent seven-day period that ended on January 14.
According to goldsmiths, after the dollar’s shortage on the open market, investors began to shift their investments to the bullion market. Compared to Rs228 in the interbank market, illicit sellers were selling the dollar for Rs280-290 in the black market.
In the meantime, domestic silver prices increased by Rs. 30 per tola and Rs. 16.78 per 10 grammes, respectively, to reach Rs. 2,100 and Rs. 1,817.19.
With the US dollar retreating from session highs and predictions of a slower pace of Federal Reserve rate hikes supporting prices over the $1,900 level, gold prices reversed course to trade higher on the global market on Wednesday. After rising $6, the price reached Rs 1,909 per ounce in the final settlement.