ISLAMABAD: Gold prices in Pakistan registered losses on Thursday as the precious metal retreated from a historic high, breaking a three-session winning streak.
The drop in gold prices was in line with the appreciation of the Pakistani rupee, which gained ground and closed at 284.42 against the US dollar in the interbank market.
Additionally, investors shifted their focus towards riskier assets following positive economic cues in the market.
According to data released by the All-Pakistan Sarafa Gems and Jewellers Association, the gold rate (24 carats) fell by PKR 2,500 per tola and PKR 2,142 per 10 grams to settle at PKR 214,500 and PKR 183,900, respectively.
Gold prices have been increasing over the last three trading sessions, as investors often turn to the precious metal as a hedge against inflation.
Pakistan’s monthly inflation during March soared to an all-time high level of 35.4% from a year earlier, with people feeling the pain of some of the fastest-rising consumer prices amid straining budgets.
The attention of investors has now shifted to other markets as the Pakistani rupee and stocks registered gains following the Saudi government’s assurance to the International Monetary Fund (IMF), the global lender, of depositing $2 billion in Pakistan.
This assurance from Riyadh will play a major role in reviving the stalled bailout program Pakistan has sought to resume since last year.
Gold prices in international market
Gold prices move in line with the rupee-dollar parity as Pakistan meets almost all its gold demand through imports, and traders follow its international price in setting rates in the country.
Jewellers import the metal against the US dollar and UAE dirham before converting its price into rupees.
The All-Pakistan Sarafa Gems and Jewellers Association also mentioned that the price of gold is PKR 8,000 per tola “undercost” in Pakistan, compared to the Dubai market, showing that the country’s gold market is currently cheaper than the global market.
Meanwhile, silver prices in the local market remained unchanged at PKR 2,450 per tola and PKR 2,100.48 per 10 grams. In the international market, gold prices declined by $4 per ounce to settle at $2,019.
