Gold prices dip Rs1,000 per tola to six-week low

Decline comes in line with downturn in world markets

KARACHI: Gold became less attractive, as jewellers in Pakistan revised price downwards by Rs1,000 per tola (11.66 grmas) to six-week low at Rs68,800 in line with downturn in the imported commodity at world markets on Tuesday.

With the fresh drop, the bullion has fallen Rs3,400 per tola, or 4.7%, since it hit all-time high of Rs72,200 at the outset of the ongoing month of April, All Sindh Saraf and Jewellers Association (ASSJA) reported while announcing new price for the next 24-hours in the afternoon.

“The drop in price was well in-line with the world trend,” Association President Haji Haroon Chand told The Express Tribune. “With a fresh drop of $8 per ounce (31.10 grams) the global commodity declined to three-and-half month low at $1,272.”

Pakistan, which remains a relatively smaller bullion market at world but largely relies on imports, issues gold price on a daily basis after incorporating factors including gold price at world markets, movement in US dollar at international and domestic markets and demand and supply of bullion at domestic markets, it was learnt.

A drastic decline in demand for gold also led to the downward revision of the price at local markets. “The gold has become under cost (cheaper) by Rs1,000 per tola while compared with the bullion price in Dubai,” he said.

“People have stopped buying gold at the current cheaper price…they surprisingly bought bullion at times when it was expensive at Rs70,000-72,000 per tola in the recent days,” he added. “This suggests that investors were the primary buyers of gold recently rather than the common man…people’s focus has shifted to kitchen expenditure ahead of the beginning of fasting month of Ramazan.”

Rays Commodities Chief Operating Officer Adnan Agar said, “Gold lost glory at global markets since investors were taking high interest in rising international stocks markets and crude oil these days.”

“US’s Nasdaq has hit all-time high while Dow Jones stood near record high… crude oil is trading at 2019’s high these days. The developments have invited full attention of global investors.”

He said gold is a safe haven and investors invest in the global commodity only during inflationary days.

“Technical analysts suggest gold may go down to $1,240-1,250 per ounce under the current bearish cycle,” he said, adding the uptrend in crude oil may return the world towards inflationary days if Saudi Arabia and some non-Opec members would not increase output of crude in the time to come. 

Published in The Express Tribune, April 24^th, 2019.

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