Gold took a breather on Wednesday as the prices of the precious metal remained unchanged in the local market as all eyes are set on political and economic developments.
Data released by All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of gold (24 carats) remained stable at Rs233,100 per tola and Rs199,846 per 10 grams, respectively.
The price of per ounce gold in the international market fell below the key level of $2,000 as the dollar gained after the latest comments from US Federal Reserve officials pushed back against prospects of interest rate cuts this year. The per ounce price settled at $1,988 after a decline of $18.
The dollar index hit a six-week high. Gold competes with the dollar as a safe store of value, and gains in the currency make bullion less attractive for overseas buyers.
“It seems some market participants still anticipate another rate hike by the US Fed”, pressuring gold, said UBS analyst Giovanni Staunovo.
High interest rates increase the opportunity cost of holding non-interest-bearing bullion.
Meanwhile, gold market has remained volatile in Pakistan recently due to several factors — economic and political turmoil, high inflation, and currency depreciation. People prefer to buy the yellow metal in such times as a safe investment and a hedge.
The safe-haven bullion had reached an all-time high of Rs240,000 per tola on May 10 following increased political uncertainty after Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan’s arrest. It dropped later in line with the decline in the international rate.
The jewellers’ body also said that local gold was “overcost” by Rs4,500 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 also remained unchanged at Rs2,950 per tola and Rs2,529.14 per 10 grams, respectively.