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Monday April 22, 2024

Gold slips ahead of interest rate announcement next week

Price of gold settles at Rs208,300 per tola after a decline of Rs400

By Business Desk
April 01, 2023
An undated image of gold bars. — AFP/File
An undated image of gold bars. — AFP/File 

Gold prices registered meagre losses on Saturday as investors stayed on the sidelines ahead of the Monetary Policy Committee (MPC) announcement due next week.

Data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of gold (24 carats) declined by Rs400 per tola and Rs343 per 10 grams to settle at Rs208,300 and Rs178,584.

Cumulatively, the precious commodity gained Rs2,600 per tola during the week ending April 1 despite gaining Rs4,100 per tola during the last four sessions (Tuesday-Friday). It gained Rs14,300, or 7.35%, per tola cumulatively in March.

Investors’ attention shifted towards the precious commodity during the week as the economic tensions continue to rise amid the International Monetary Fund (IMF) reviewing external financing commitments from friendly countries before it releases bailout funds.

The delay in the revival of the programme negatively impacted the currency market which in turn is 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.

The association also mentioned that the price of gold is Rs8,000 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 Rs2,270 per tola and Rs1,946.15 per 10 grams, respectively.

In the international market, the per-ounce gold price declined by $12 to settle at $1,969 but was on track for a second straight quarterly rise, as growing bets that the US Federal Reserve will slow the pace of interest rate hikes drew investors to the metal.

Bullion has added more than 8% so far this quarter and was also headed for its best month since November 2022.