Wednesday April 24, 2024

Gold rate declines slightly from all-time high

Analyst says the decrease in local rate is in line with the international market

By Business Desk
May 05, 2023
An undated image of gold bangles. — AFP
An undated image of gold bangles. — AFP

After reaching another all-time high a day earlier, the rate of gold declined slightly in Pakistan Friday in line with developments in the international market.

The rate of gold (24 carats) decreased by Rs300 per tola and Rs257 per 10 grams to reach Rs225,000 and Rs192,901, respectively, data provided by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed.

Meanwhile, the price of the precious metal in the international market went down $8 to settle at $2,036 per ounce.

AA Gold Commodities Director Adnan Agar said the decrease in the domestic rate was a “correction” after yesterday’s record. 

Agar said the rates declined due to profit-taking as people tend to start selling their gold when it reaches a record high as it did yesterday and then wait for some time before buying it again.

The analyst said the precious metal was expected to reach another all-time high this month.

Regarding the decrease in international rates, Agar said that United States employment data negatively affected the market. Besides this, there was uncertainty over when the US Congress would raise the debt limit ceiling which was causing volatility in the market. 

The gold rate has been on a steady uptrend in Pakistan, as economic fundamentals weakened, the rupee depreciated and inflation soared to record highs. During such times, people prefer to buy the yellow metal to protect themselves against inflation and currency depreciation.

The rupee — which has been trading in the range of Rs283-284 after falling to a record low on April 11 — gained Re0.23 to close at Rs283.59 per dollar in the interbank market Friday.

Meanwhile, talks between the government and the International Monetary Fund (IMF) for a crucial economic bailout have been stalled for months.

The delay in the revival of the IMF programme negatively impacts the currency market which, in turn, bolsters the demand for gold.

Another factor behind the soaring gold rate is inflation, which clocked in at 36.4% year-on-year in April — a record high. It means Pakistan has the fastest rising prices in Asia, beating even Sri Lanka where inflation was measured at 35.3% in the previous month.

The association also mentioned that the price of gold is Rs1,500 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.

Separately, the price of silver reached a fresh high in Pakistan, with the rate rising by Rs80 per tola and Rs68.58 per 10 grams to reach Rs2,950 and Rs2,529.14, respectively.