Gold edges higher in line with global markets

• Domestic gold prices settle at Rs113,600 per tola and Rs97,394 per 10 grams on Wednesday.
• International gold price rises by $16 per ounce to $1,803.
• Silver prices clock in at Rs1,410 per tola and Rs1,208 per 10 grams on Wednesday.

KARACHI: Gold prices held below the key level of Rs114,000 per tola on Wednesday, as a buoyant dollar made bullion more expensive for holders of local currency, while investors await clues from the State Bank of Pakistan (SBP) on their forex intervention measures.

Gold prices in the local bullion market gained Rs900 per tola and Rs772 per 10 grams on Wednesday to reach Rs113,600 per tola and Rs97,394 per 10 grams amid rising prices in the international markets.

The precious commodity closed at Rs112,700 per tola and Rs96,622 per 10 grams on Tuesday.

The international gold price rose by $16 per ounce to $1,803 today as the dollar and bond yields came under pressure after a tamer-than-expected rise in US inflation led to uncertainty on when the US central bank will begin tapering its asset purchases.

Speaking to Geo.tv, a gold dealer Abdullah Abdul Razak Chand said: “Gold prices in the local market rose in line with the international market.”

“A depreciating rupee has a significant impact on bullion prices. If according to rumours, the local currency drops to Rs175 against the US dollar, then gold prices are expected to reach Rs116,000-117,000 per tola,” the dealer added.

Shedding light on the local demand for yellow metal, Chand said: “Overall demand for gold is low because of Muharram and Safar. Moreover, the customers lack purchasing power.”

“However, as the government has now allowed markets to remain open till 10pm and has eased other COVID-related restrictions, we feel the gold market will now perform better,” he said.

It is pertinent to mention that the gold rates in Pakistan are around Rs4,000 below cost compared to the gold rate in the Dubai market.

Meanwhile, silver prices in the domestic market fell Rs20 per tola and Rs17 per 10 grams to close at Rs1,410 per tola and Rs1,208 per 10 grams on Wednesday.