Saturday May 18, 2024

Gold glitters in Pakistan as rupee retreat adds sheen

Price of gold is Rs9,000 per tola “undercost” in Pakistan as compared to Dubai market

By Business Desk
March 29, 2023
An undated image of gold jewellery displayed at a store. — AFP/File
An undated image of gold jewellery displayed at a store. — AFP/File

Gold maintained its course to trade higher after the rupee fell as silence from the International Monetary Fund (IMF) over revival of the bailout programme fueled concerns regarding the country apparently being pushed towards bankruptcy.

According to the data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) surged by Rs2,300 per tola and Rs1,973 per 10 gram to settle at Rs207,900 and Rs178,241.

The IMF wants external financing commitments fulfilled from friendly countries before it releases bailout funds; however, the delay dented the sentiments of investors in the currency market bolstering demand for gold.

Gold price moves in line with the rupee-dollar parity as the country meets almost all its gold demand through imports, and traders follow its international price in setting rates in the country.

Jewellers import the metal against the US dollar and UAE dirham before converting its price into rupees.

Moreover, a hike in seasonal demand added fuel to the rising prices in the local bullion market. Cumulatively, the precious commodity gained Rs3,300 per tola in two sessions (Tuesday-Wednesday).

The association also mentioned that the price of gold is Rs9,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.

Meanwhile, silver prices in the domestic market remained unchanged at Rs2,250 per tola and Rs1,929 per 10 grams, respectively.

In the international market, the per-ounce price settled at $1,967 after an increase of $10 despite investors trickling back into riskier assets, betting that risks of contagion from the global banking crisis have been curbed for now.