KARACHI: Gold bounced off on Thursday after undergoing correction a day earlier, gaining over Rs700 per tola as the rupee eased and persistent economic concerns boosted bullion’s safe-haven appeal.
Data released by All Sindh Sarafa and Jewellers Association (ASSJA) showed that the price of gold rose by Rs750 per tola and Rs644 per 10 grams to settle at Rs150,850 and Rs129,330.
Inflation fears boost gold, which is seen as a safe haven against rising prices.
High inflation is in favour of precious metals and analysts believe that it is not going to go away anytime soon. They believe that constant fluctuations in rupee-dollar parity were limiting the gains in gold and could force the metal to trade sideways and be choppy.
The yellow metal had scaled record in July. Prices have since moved into a steadier range as the market digested a more hawkish outlook from the depreciating rupee and falling markets.
The precious commodity remains caught between elevated inflation, growing concerns over a recession and a flight to quality on the one hand, but sharp rate hikes, a strong dollar globally and seasonally weak demand on the other.
Physical buyers were still on the sidelines hoping for bigger falls in a seasonally lean demand period.
Investors who used to pour money into foreign currencies, particularly the US dollar to avoid the impact of inflation, are now buying gold because the government and the central bank are trying to reduce the rupee-dollar parity.
Past practices suggest that people used to take aggressive positions in gold in inflationary days. In the international market, the price of yellow metal jumped by $23 per ounce to settle at $1,725.
Gold rates in Pakistan are around Rs4,000 below the cost compared to the rate in the Dubai market.
Meanwhile, silver prices in the domestic market remained unchanged at Rs1,480 per tola and Rs1,268.86 per 10 grams.