While the rupee continued to whimper against the dollar after being left at the mercy of the rogue market forces to persuade the International Monetary Fund (IMF) to open a frozen loan, gold prices in Pakistan roared to a new record high on Monday, according to traders.
The price of gold (24 carats) climbed by Rs 1,500 per tola and Rs 1,286 per 10 kilos, according to the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), to settle at Rs 210,500 per tola and Rs 180,470 per 10 grammes, respectively.
The jewellers’ association also claimed that local gold in Pakistan was “overcost” by Rs5,000 a tola when compared to the bullion market in Dubai.
Dealers cited a record-breaking devaluation of the rupee and a sharp fall in the nation’s foreign exchange reserves as main causes behind the large price increase in the bullion market. Dealers were already looking at the 200,000+ per tola rate since the current price hike frenzy.
However, investors were only buying gold bars, not jewellery, which had lowered goldsmiths’ profit margins and put the labour force at risk of losing jobs as jewellery manufacturers turned to other professions in the absence of business, according to a Friday story in The News.
However, investors were only buying gold bars, not jewellery, which had lowered goldsmiths’ profit margins and put the labour force at risk of losing jobs as jewellery manufacturers turned to other professions in the absence of business, according to a Friday story in The News.
As investor attention shifted to various central bank meetings this week for more clarity on their rate hike strategy, with the US Federal Reserve as the main focus, gold in the foreign market nudged up on a lower dollar.
To $1,928.36 per ounce, spot gold increased 0.1%.
“Gold is easing away from a nine-month high as the US dollar and yields stabilise, as markets eagerly await the Fed’s latest policy guidance,” said Han Tan, chief market analyst at Exinity.
Because the dollar fell by 0.2%, clients holding other currencies found bullion—which is priced in US currency—to be more alluring.
At the conclusion of its two-day policy meeting on February 1, market participants anticipate the US central bank to raise interest rates by 25 basis points (bps).
After economic statistics indicated signs of slowing US inflation and US consumer expenditure declined for a second consecutive month in December, the economy is expected to develop less rapidly through 2023.
Since there is less opportunity cost associated with retaining bullion when interest rates are low, gold, which doesn’t pay interest, typically benefits.
