As uncertainty around the US debt ceiling continued and investors looked at the Federal Reserve for future direction on the interest rate, the rate of gold fluctuated in both the international and Pakistani markets.
The price of gold (24 carats) increased by Rs450 per tola and Rs385 per 10 grams to reach Rs236,200 and Rs202,503, respectively, data provided by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed.
Cumulatively, the domestic rate dropped by Rs1,100 this week.
Meanwhile, the price of gold declined by $6 in the international market to settle at $1,946 per ounce.
US Democrats and Republicans are putting the final touches to a last-minute deal to raise the federal debt limit for two years.
If the debt ceiling — which is currently capped at $31.4 trillion — is not raised, it would trigger the first-ever US default.
Besides this, international traders are also expecting the Federal Reserve to hike the interest rate for the 11th consecutive time in June after US inflation clocked in higher than the 2% target. High interest rates negatively affect gold’s value.
Separately, the domestic price of gold has remained volatile due to a number of factors, including 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 jewellers’ body also said that local gold was “overcost” by Rs1,300 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 remained unchanged at Rs2,900 per tola and Rs2,486.28 per 10 grams, respectively.