Gold price in Pakistan drops by Rs300 per tola

Gold price in Pakistan drops by Rs300 per tola

Gold bangles are displayed at a gold shop in Gold Souq in Dubai, United Arab Emirates, December 30, 2018. Picture taken December 30, 2018. — Reuters/File
Gold bangles are displayed at a gold shop in Gold Souq in Dubai, United Arab Emirates, December 30, 2018. Picture taken December 30, 2018. — Reuters/File

KARACHI: Gold prices edged lower on Saturday in the domestic market as a slight recovery in rupee-dollar parity on Friday made bullion more expensive for holders of the local currency.

Gold prices in the local bullion market lost Rs300 per tola and Rs257 per 10 grams to reach Rs118,000 per tola and Rs101,166 per 10 grams.

The precious commodity closed at Rs118,300 per tola and Rs101,423 per 10 grams on Friday.

Local dealers are, however, satisfied with the decline in gold prices as they believe that this will increase the already surging seasonal demand for gold due to the wedding season.

It is pertinent to mention that the gold rates in Pakistan are around Rs1,000 below cost compared to the gold rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,430 per tola and Rs1,226 per 10 grams.

International bullion market

Bullion prices in the international market recorded a decline of $12 per ounce to settle at $1,767 as a rebound in US bond yields and a surprise increase in September retail sales dented bullion’s safe-haven status.

“Gold has everything going against it. Real rates are rising, equities are higher, so is bitcoin,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

US retail sales unexpectedly increased in September, boosting equities, and extending losses in risk-hedge gold.

Raising gold’s opportunity cost, US benchmark 10-year Treasury yields recovered from a more than one-week low hit on Thursday.

While most Fed policymakers agree the central bank could start reducing its monthly bond purchases as soon as next month, they are sharply divided over inflation and what they should do about it.

Investors are likely expecting only a moderate tightening from major central banks and “that shouldn’t cause too much of a problem for gold as investors hedge against elevated price levels,” said ThinkMarkets analyst Fawad Razaqzada.

Reduced stimulus and interest rate hikes push government bond yields up, raising the opportunity cost of holding non-yielding bullion.

In the physical markets, gold prices flipped to premiums in India, bolstered by festival demand.

Bullion remains on course for a small weekly gain as the dollar weakened.

— With additional input from Reuters

This content was originally published here.

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