Gold lost further ground Wednesday as the rupee recovered against the dollar on hopes that Pakistan will be able to strike an agreement with the International Monetary Fund (IMF) deal, which will help stabilise the market.
According to All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) decreased Rs2,000 per tola and Rs1,715 per 10 grams to settle at Rs198,000 per tola and Rs169,753 per 10 grams, respectively.
Gold fell for the fourth straight session — cumulatively Rs10,500 since February 4.
If the government is successful in restarting the IMF programme, it will help Pakistan get inflows and boost its forex reserves, however, if the economic uncertainty persists, gold is expected to get dearer as Pakistan imports the yellow metal.
Investors were, however, purchasing only gold bars, not jewellery, which had not only reduced goldsmiths' profit margins but the labour force was also at the stake of losing jobs, as jewellery makers were moving towards other professions in absence of work.
In the international market, gold extended gains to a third session boosted by a weaker dollar and comments from US Federal Reserve Chair Jerome Powell, while markets awaited more economic data for guidance on future rate hikes. Spot gold rose $11 to $1,880 per ounce.
Meanwhile, silver prices in the domestic market decreased Rs60 per tola and Rs51.44 per 10 grams to settle at Rs2,170 and Rs1,86042, respectively.
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Price of gold soars by Rs5,600 per tola to settle at Rs207,500