Gold prices in Pakistan reversed yesterday’s losses today (Wednesday) after the Pakistani Rupee fell against the US Dollar in interbank trade amid a tricky round of talks with the International Monetary Fund (IMF).
According to the data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) increased by Rs. 3,500 per tola to settle at Rs. 205,000. Similarly, the price of 10 grams of gold increased by Rs. 3,000 to settle at Rs. 175,754.
Today’s gold surge is credited to the rupee reversal after talks between Pakistan and the IMF deliberated on contingency measures to generate additional tax revenue to the tune of Rs. 300 billion for the remainder of the current fiscal year.
The rise in bullion prices also coincides with an increased demand for the rare metal as Pakistan’s inflation jumped to a 47-year high of 27.6 percent, owing to food supply constraints and a significant increase in the price of petroleum products.
Spot gold in the international markets was up 0.11 percent after initially dropping $10 during the early hours of trade today. Bullion dropped to $1,922.50 per ounce at 10:40 AM before recovering gains and rising as high as $1,933 at 18:10 PM. Similar to Tuesday’s trends, gold prices were initially under pressure due to the strengthening dollar amid rising speculation regarding the US Federal Reserve’s rate decision and policy statement to be announced later today.
In any case, the US dollar might weaken and bond yields could fall after the US rate hike but gold appears to have priced in much of this risk early on and may move higher by the weekend.
