- Gold prices settle at Rs127,000 per tola.
- International gold price edges down by $4 per ounce to $1,896.
- Silver prices in the domestic market remain unchanged.
KARACHI: Gold pared gains in a volatile trade on Monday as a possible summit between the US and Russian presidents to discuss Ukraine encouraged risk sentiment and nudged investors away from safe-haven assets.
Gold prices in the local bullion market recorded a decrease of Rs100 per tola and Rs86 per 10 grams to settle at Rs127,000 per tola and Rs108,882 per 10 grams.
A day earlier, the yellow metal closed at Rs127,100 per tola and Rs108,968 per 10 grams.
It is pertinent to mention that the gold rates in Pakistan are around Rs3,500 below the cost compared to the gold rate in the Dubai market.
The international gold price crawled down by $4 per ounce to $1,896 as a potential meeting, while easing demand for gold, also led to a slight move away from its rival safe-haven the US dollar, limiting losses in the greenback-priced bullion.
“(Gold) is holding up well. The last time we moved up to these levels it ended up being a bull trap and the market came off very sharply. We’ve seen some good flows into the Exchange-Traded Fund (ETF), which is encouraging,” independent analyst Ross Norman said.
Meanwhile, silver prices in the domestic market remained unchanged at Rs1,460 per tola and Rs1,251.71 per 10 grams today.
Govt mulls proposal to borrow gold biscuits from people
According to a report published in The Express Tribune, in order to increase foreign exchange reserves, a proposal is being considered by the government to borrow gold biscuits and bars from the people.
The decision was taken keeping in view that the foreign exchange reserves sliding path despite taking over $5 billion loans in the past three months from bilateral and multilateral creditors.
Per the report, the proposal has been discussed in the Economic Executive Council (EEC) – the body comprising all economic ministers and the State Bank of Pakistan (SBP) governor.
The publication reported that according to the proposal, the commercial banks will issue a negotiable discounted instrument to the gold owner and pay an interest rate on the precious metal.
The commercial bank will deposit the gold with the SBP that can monetise it to increase the foreign exchange reserves — already largely built by taking expensive foreign loans.
— Additional input from Reuters