ISLAMABAD: Gold prices in the local market remained on an upward slide on Friday due to rupee’s depreciation against the US dollar and price of one tola of 24-karat gold reached Rs222,700. According to the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of one tola of 24-karat gold increased by Rs1,700 to Rs222,700 from Rs221,000 a day earlier. TLTP
Similarly, the gold rate for 10 grams of 24-karat rose to Rs190,930. Following suit, 10 grams of 22-karat gold were being traded for Rs177,930 while one tola of 22-karat gold was available at Rs204,150.
Overall, the price of one tola of 24-karat gold has increased by Rs18,700 during the last seven sessions, as the price was Rs204,000 on Wednesday (July 12). The surge in gold prices can be attributed to the depreciation of the Pakistani rupee against the US dollar for six consecutive trading sessions. Since gold is denominated in US dollars, when the Pakistani rupee depreciates against the US dollar, the value of gold rises in Pakistan.
As of 1210 hours GMT, gold futures in the international market were available at $1,965.50 per ounce, showing a decrease of $3.50 (-0.18 percent). Out of the $3.50 per ounce decrease, -$4.85 was due to strengthening of the US dollar and +$1.35 was due to predominant buyers, according to Kitco Gold Index.
Gold price faces an intense sell-off as investors are confident that the Federal Reserve will raise interest rates further on July 27. More rate hikes are broadly anticipated as the United States’ core inflation remains resilient. In addition to the Fed, the Bank of England (BoE) and the European Central Bank (ECB) are also preparing for raising interest rates further so that inflation can return to the 2 percent target. The appeal for gold is diminishing as more interest-rate hikes from the Fed would also propel fears of a recession in the United States.
