Gold prices in Pakistan fell below Rs 200,000 per tola as the rupee continued to recover against the dollar, prompting investors to shun the safe-haven metal.
According to the All Pakistan Sarafa Gems and Jewelers Association (APSGJA), gold prices (24 carat) fell by Rs 2,000 per tola and Rs 1,715 per 10 grams to Rs 198,000 and Rs 169,753 respectively.
The yellow metal rose above Rs 8,500 in three trading sessions, up from a cumulative of Rs 5,900, or 3.03% per tola, for the week ended March 4.
The commodity hit an all-time high of 210,500 per tola on January 30, 2023; however, gold prices began to fall after the rupee recovered on hopes of a revival of the $6.5 billion International Monetary Fund (IMF) bailout.
It should be noted that Pakistan meets almost all of its gold demand through imports, and traders follow its international price while setting rates in the country. Jewelers import the metal against US dollars and UAE dirhams before converting its price into rupees.
Meanwhile, domestic silver prices remained unchanged at Rs 2,140 per tola and Rs 1,834.70 per 10 grams, respectively.
Internationally, gold prices retreated from their 2-1/2-week highs as traders awaited guidance this week from US Federal Reserve Chairman Jerome Powell on future rate hikes.
The price of one ounce of gold was $1,849 with a slight increase of $8.
All eyes will be on Powell’s testimony to Congress on Tuesday and Wednesday, followed by the February jobs report on Friday.
“Gold is currently in wait-and-see mode,” UBS analyst Giovanni Staunovo said. “Reiterating the need for further rate hikes to bring inflation under control, Powell is unlikely to change the script.”
While gold is seen as a hedge against inflation, rising interest rates reduce appetite for zero-yield bullion.
