Gold bounces back in Pakistan as price rises by over 1%

F.P. Report

KARACHI: Gold resumed its climb on Tuesday after a knee-jerk retreat tied to the appreciation of the Pakistani rupee and anticipation of the monetary policy announcement, as the dollar slipped in the international market with investors latching on to a slight cooling of consumer prices.

Data released by All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the gold price surged by Rs2,150 per tola and Rs1,843 per 10 grams to settle at Rs148,450 per tola and Rs127,272 per 10 grams, respectively.

Investors are still nervous ahead of the monetary policy announcement on how aggressive the State Bank of Pakistan (SBP) will be.

The rupee’s strength was hurting gold even though the precious metal was regaining shine in the international market. But gold has bounced back with the thinking that the inflation data is higher than expected, but not horrifying.

Investors, who were awaiting September’s inflation data to gauge its likely impact on the SBP’s rate hike plans, are now eyeing the MPC’s decision due on Monday (October 10).

Gold is considered a hedge against inflation and economic uncertainties. However, it is highly sensitive to rising interest rates, which raise the opportunity cost of holding non-interest-bearing bullion.

In the international market, the price of the yellow metal jumped by $38 to firm above the key $1,700 per ounce level on a retreat in the dollar and US Treasury yields as investors expected the Federal Reserve to tone down its pace of monetary tightening. The price settled at $1,704.

Gold rates in Pakistan are around Rs3,000 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market gained Rs60 per tola and Rs51.44 to settle at Rs1,620 per tola and Rs1,388.88 per 10 grams.

Courtesy: (Geonews)