Gold shed its value Wednesday in Pakistan mainly owing to a battered rupee that has been trading around an all-time low from the past several sessions.
The price of gold (24 carats) decreased by Rs300 per tola and Rs257 per 10 grams to settle at Rs218,000 and Rs186,900, respectively, according to the data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA).
The precious metal’s drop was in line with the rupee movement — which gained 1.81 or 0.63% to 286.62 against the US dollar in the interbank market.
Gold had been trading at historic highs during the ongoing week as the rupee’s value declined and inflation remained at an all-time high. The yellow metal is considered to be a hedge against inflation and people prefer to buy it during economic turmoil. Its value also usually goes up in Ramadan due to increased demand.
Weekly inflation jumped up 0.92% week-on-week and 44.49% year-on-year during the seven-day period that ended April 6, as prices of sugar and chicken surged on account of Ramadan and likely hoarding.
Investors’ attention has shifted towards the precious commodity during the week as economic tensions continue to rise amid the International Monetary Fund (IMF) reviewing external financing commitments from friendly countries before it releases bailout funds.
The delay in the revival of the programme negatively impacted the currency market which in turn is bolstering demand for gold.
The association also mentioned that the price of gold is Rs4,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.
Meanwhile, silver prices in the domestic market remained stable at historic highs of Rs2,520 per tola and Rs2,160.5 per 10 grams.
In the international market, gold price gained $8 per ounce to settle at $2,009.