Gold falls by Rs13,000 per tola for 2nd week

0
109

ISLAMABAD
Gold price in the country decreased for the second consecutive week by Rs13,000 (-6.02 percent) per tola on a week-on-week basis after falling by Rs2,200 in the preceding week, amid rupee’s appreciation against the US dollar and a dip in international bullion prices.
The gold rate for a single tola of 24-karat on a week-on-week (WoW) basis decreased to Rs202,800 from Rs215,800, according to different local gold markets. Similarly, the gold rate for 10 grams of 24-karat decreased to Rs173,870 from Rs185,020 a week ago, showing a decline of Rs11,150. Likewise, 10 grams of 22-karat gold were being traded for Rs159,380 against Rs170,068 during the previous week while price of a single tola of 22-karat gold decreased to Rs185,900 from Rs198,365 on a week-on-week basis.
It is to be noted that local bullion pricing bodies, Karachi Sarafa Market and All Pakistan Gems and Jewelers Association, have refrained from announcing daily commodity prices since September 13 and the prices quoted above are being collected from different markets. This decision follows a crackdown on alleged betting and smuggling activities by certain institutions. This is sparking speculation about potential actions against gold smugglers or a downward trend in the country’s precious metal market, leading to silence from the pricing body. It is worth noting that in the absence of official gold rates, consumers at jewelry shops are experiencing a state of confusion.
Meanwhile, the Pakistani rupee extended gains against the US dollar for the fourth consecutive week and appreciated by 1.38 percent in the interbank market and 2.4 percent in the open market. Since gold is denominated in the US dollars and when the local unit appreciates against the greenback, the value of gold in the local market usually falls if international prices remain the same.
In global markets, gold closed the week at $1,848.40 per ounce against $1,924.80 in the preceding week, showing a week-on-week decrease of $76.40 (-3.97 percent). Similarly, the gold price fell by $99.80 in the month of September.
The headwinds from persistent strength in the US dollar and 10-year bond yields over 4.5 percent have proved too much for the gold market as prices fall to their lowest level since March. According to some analysts, the bearish momentum in gold could push prices back down to their 2023 lows at $1,810 in the spot market.
The analysts noted that gold’s selloff came after the Federal Reserve signaled that it expected to maintain a restrictive monetary policy for the foreseeable future even as its tightening cycle comes to an end.
The US central bank’s aggressive stance has pushed bond yields to fresh 16-year highs and the US dollar to its highest level since November. They said that Europe’s weakening economy is also a significant factor in the US dollar index’s latest run above 106 points. They added that it will be difficult for traders to dethrone the greenback as the US economy remains reasonably resilient compared to other countries.
Although gold remains under near-term pressure, some analysts maintain their long-term bullish outlook on the precious metal. They said that gold would need to see a decisive break below $1,800 an ounce before its fundamental outlook changes. They added that rising energy prices coupled with slower economic growth are creating a stag-flationary environment, which will eventually push gold prices back above $2,000 an ounce.