Gold prices fell for the second consecutive day on Thursday, as the rupee appreciated against the US dollar in the interbank market.
According to the data released by All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) declined by Rs500 per tola and Rs429 per 10 grams to reach Rs217,500 and Rs186,471, respectively.
The precious metal had reached record highs earlier this week, owing to the local currency’s downtrend.
The fall in the precious metal’s value was in line with the rupee’s upward movement, with the local currency appreciating Rs1.71 or 0.6% to settle at Rs284.91 per US dollar in the interbank market.
The yellow metal had reached an all-time high in Pakistan on Tuesday, with the price of gold (24 carats) jumping to Rs218,300 per tola as the rupee plunged and inflation remained at record levels. People prefer to buy gold as a hedge against inflation. Its value also usually goes up in Ramadan due to increased demand.
Weekly inflation jumped 0.92% week-on-week and 44.49% year-on-year during the seven-day period that ended April 6, as prices of sugar and chicken surged on account of Ramadan and likely hoarding.
Consequently, investors’ attention shifted towards the precious commodity during the week as economic tensions continued to rise amid the International Monetary Fund (IMF) reviewing external financing commitments from friendly countries before it releases bailout funds.
The delay in the revival of the programme negatively impacted the currency market which, in turn, bolstered demand for gold.
The association also mentioned that the price of gold is Rs4,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.
Meanwhile, silver prices in the domestic market reached new highs of Rs2,550 per tola and Rs2,186.21 per 10 grams.
In the international market, gold price gained $18 per ounce to settle at $2,027.