- Bullion price rise by Rs50 per tola to settle at Rs125,200.
- Gold rates in Pakistan are around Rs3,000 below the cost.
- Silver prices in the domestic market remain unchanged.
KARACHI: In line with the international market, the gold price in Pakistan extended gains on Monday despite a recovery in the Pakistani rupee.
The price of precious commodity rose by Rs50 per tola and Rs42 per 10 grams to settle at Rs125,200 and Rs107,338, respectively.
Cumulatively, the safe-haven asset had lost Rs1,050 per tola during the week ended January 15.
Meanwhile, gold dealers said that due to a lack of purchasing power, there is no demand in the local market.
In the international market, gold recorded a slight increase of $3 per ounce to settle at $1,822 after two sessions of losses as the dollar weakened, but rising expectations of monetary policy tightening in the United States lifted Treasury yields and kept bullion’s gains in check.
“In our opinion, market participants are likely to refrain from buying gold ahead of the US Fed’s first rate hike,” Commerzbank analysts wrote in a note.
“They may be hoping that the Fed’s meeting next week will give them further and/or clearer signals that the Fed will be commencing its rate hike cycle in March.”
Gold is considered an inflationary hedge, but the metal is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion.
It is pertinent to mention that the gold rates in Pakistan are around Rs3,000 below the cost compared to the gold rate in the Dubai market.
Meanwhile, silver prices in the domestic market remained unchanged at Rs1,450 per tola and Rs1,243.14 per 10 grams today.
— With additional input from Reuters