Wednesday November 29, 2023

Gold rate sees minor decline in Pakistan as international price drops

Rate of gold (24 carats) falls by Rs1,000 per tola

By Business Desk
May 19, 2023
Gold bars are seen in this undated file photo. — AFP
Gold bars are seen in this undated file photo. — AFP

The domestic gold price fell Friday after a decline in the international market as optimism rose about a US debt limit deal that would prevent one of the world's largest economies from defaulting.

According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the rate of gold (24 carats) decreased by Rs1,000 per tola and Rs857 per 10 grams to reach Rs232,600 and Rs199,417, respectively.

Meanwhile, the international rate went down $12 to settle at $1,964 per ounce.

The rate of the safe-haven bullion has fluctuated in the international market recently as the US Congress failed to reach a deal on raising the federal debt limit, without which the country would be unable to pay government bills through June 1 and default.

However, the yellow metal was on track for its worst week since early February on Friday after Democrat lawmakers informed US President Joe Biden that they were making "steady progress" in talks with Republicans on the US debt limit.

"Gold has been dragged below the psychologically-important $2,000 level this week due to optimism surrounding a US debt deal," Han Tan, chief market analyst, Exinity, told Reuters.

Moreover, "the hawkish undertones from recent Fed speak, along with some still-resilient US economic data have prompted markets to now forecast a 30% chance of a June rate hike," Tan added.

High-interest rates discourage investment in non-yielding bullion.

Meanwhile, the price of the yellow metal has fallen from a record high of Rs240,000 per tola in Pakistan in recent days due to both international developments as well as a decline in countrywide unrest following the release of Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan.

The jewellers' body also said that local gold was "overcost" by Rs5,000 per tola in Pakistan compared to the Dubai bullion market. This means that, at present, the Pakistani gold market is more expensive than the world market.

Data shared by the association showed the price of silver dropped Rs50 per tola and Rs42.87 per 10 grams to settle at Rs2,850 and Rs2,443.41, respectively.