Gold price dips Rs2,500 on easing of Mideast tensions

Price fall reflected decline in international rates

KARACHI: The gold price on Thursday dropped by Rs2,500 to Rs90,500 per tola in Pakistan due to de-escalation of regional tensions.

According to data provided by the All Sindh Saraf and Jewellers Association, the 10-gram gold price fell Rs2,141 to Rs77,590. The bullion price dropped $32 to $1,548 per ounce in the international market, the data showed.

Earlier on Monday, the gold price spiked to an all-time high at Rs93,400 per tola following the escalation of regional tensions as the US killed an Iranian military commander in a drone strike. Later, Iran targeted the military bases in Iraq housing US forces which heightened the tensions.

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However, US President Donald Trump in a speech on Wednesday signaled towards de-escalation after which gold prices started falling.

Talking to The Express Tribune, commodities analyst Adnan Agar said the plunge in the price of gold was a reflection of the fall in international prices of bullion.

"Oil prices are also falling in the global market, which earlier rose following the increase in regional tensions," he said. "Gold is considered a safe haven, hence, investment in the commodity soared when a war-like situation emerged."

He added that the international price of gold rose to $1,610 following Iran's attack on the military bases housing US troops in Iraq early on Wednesday morning. However, the price has now fallen. Moreover, he said, the price was expected to remain in a range of $1,500-1,530 per ounce.

According to Reuters, oil prices in the international market retreated further on Thursday after sharp losses in the previous session as fears of an imminent escalation of conflict between the United States and Iran were alleviated.

Broadly, prices were moving back towards where they stood before the January 3 US drone strike that killed a top Iranian general. Brent crude futures were down $0.39 at $65.05 a barrel at 1447 GMT, with the downward move accelerating once US markets woke up. West Texas Intermediate was down $0.37 at $59.24 after sliding nearly 5% the previous day.

Published in The Express Tribune, January 10^th, 2020.

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