ISLAMABAD
Gold prices in the country surged by Rs5,300 (2.35 percent) per tola last week due to political unrest and law and order situation in the country despite rupee’s relatively lower depreciation of 0.53 percent against the US dollar.
The gold rate in the country for a single tola of 24-karat reached Rs230,800 from Rs225,500 a week earlier. Similarly, the gold rate for 10 grams of 24-karat reached Rs197,900 from Rs193,400 on a week-on-week basis, showing an increase of Rs4,500. Similarly, the gold price for 22-karat was recorded at Rs 213,000 against Rs206,800 per tola a week ag0.
Though actual gold prices for 24-karat in the country stand at Rs224,500 per tola, even keeping the PKR to USD exchange rate in open market in mind, All Pakistan Sarafa Gems and Jewellers Association (APSGJA) keeps prices on upward scale, citing rate of futures and certain other factors.
The gold rate has been on a steady uptrend in Pakistan due to massive depreciation of the rupee against the US dollar for the past one year. However, political chaos and law and order situation in the country last week added fuel to fire and gold prices witnessed unprecedented high levels, with one tola price reaching Rs240,000. During such times, people prefer to buy yellow metal to protect themselves against inflation and currency depreciation.
Internationally, the gold futures ended the week lower by 0.40 percent to $2,010.50 against $2,018.60 per ounce a week earlier. Gold price came under heavy bearish pressure on the last day of the week and tested $2,000 before recovering to the $2,010. During the week, the US dollar showed strength and so were the US treasury bond yields.
The gold price is inversely proportional to US treasury bond yields, and rising yields stopped gold prices going forward. A sharp intraday rise in the US government bond yields turned out to be a key factor driving flows away from the non-yielding gold prices.
Another reason that weighed on gold prices is that global demand for gold fell during the first quarter of 2023. According to a report released by the World Gold Consortium, large purchases made by central banks and Chinese consumers were offset by investors’ buying. Gold price is continuing to hold its own just above the $2,000 mark.
Economists expect that the gold price has been close to itss all-time high over the last few months and is likely to come under pressure yet again. However, they expect a rise in prices again towards the end of the year.
