Gold price hits all-time high
Pakistan's market follows global trend as investors park money in precious metal
PHOTO: FILE
KARACHI:
The gold price hit an all-time high at Rs93,650 per tola (11.66 grams) in Pakistan on Friday in line with the global trend as investors parked money in the precious metal following the outbreak of deadly coronavirus in China that had started taking its toll on the world economy.
The price of gold, considered a safe haven, soared $23 to a seven-year high at $1,635 per ounce (31.10 grams) in the global market, the All Sindh Saraf and Jewellers Association (ASSJA) reported.
The death toll from the coronavirus rose to over 2,200 people, which infected more than 75,000 people since its outbreak in China a couple of months ago. Now, it has spread to over two-dozen countries.
"The spread of coronavirus is feared to badly impact the global economy," Rays Commodities' former chief operating officer Adnan Agar said while talking to The Express Tribune.
In Pakistan, gold touches record high at Rs93,400 per tola
Gold is likely to maintain the uptrend until the spread of the virus is stopped. "Bullion may test $1,670-1,680 an ounce under the current cycle of the uptrend. If the world fails to control the virus, gold may test $1,700-1,800," he added.
"Gold may face mild resistance at the first technical level of $1,670-1,680 per ounce."
Economic activity in China, the world's second-largest economy, has been drastically slashed to avoid the spread of the virus. "An estimated 70-80% of production capacity is staying shut in China since the outbreak of the virus," Agar stated.
Global stock markets, especially those of China and the US, are on a downward trend due to the impact of the virus on the world economy. "The yield of 30-year US Treasury bonds hit an all-time low today (Friday)," he said.
"American technology giant Apple - the second largest company in the world - is facing a significant drop in both supply and demand of its products since China remains its main production point and the main market as well," Agar said.
"Central banks of the US and China have been injecting billions of dollars into their respective economies to avoid economic collapse."
China has injected around $200 billion to keep its economy alive since the virus outbreak. Similarly, the US has pumped around $400-450 billion since October to stimulate its economy, which has been impacted due to the trade war with China.
"China's economy, which grew around 6% per year in the recent past, is feared to slow down to 3.5% this year due to the closure of production houses," he said.
Gold hits five-month high on escalating global tensions
Agar was of the view that the global economic slowdown and recession in some economies may spark a new wave of inflation and currency depreciation around the world. "Keeping these trends in view, international investors may continue to take fresh positions in gold."
All Sindh Saraf and Jewellers Association's member Abdullah Abdul Razzak stated that although gold hit an all-time high in Pakistan, its price still stood below cost. "Gold is cheaper by Rs2,000 per tola compared to its price in Dubai," he said.
"Gold is expected to maintain its uptrend…may soar to Rs96,000-97,000 per tola (in Pakistan) under the current cycle."
Published in The Express Tribune, February 22nd, 2020.
The gold price hit an all-time high at Rs93,650 per tola (11.66 grams) in Pakistan on Friday in line with the global trend as investors parked money in the precious metal following the outbreak of deadly coronavirus in China that had started taking its toll on the world economy.
The price of gold, considered a safe haven, soared $23 to a seven-year high at $1,635 per ounce (31.10 grams) in the global market, the All Sindh Saraf and Jewellers Association (ASSJA) reported.
The death toll from the coronavirus rose to over 2,200 people, which infected more than 75,000 people since its outbreak in China a couple of months ago. Now, it has spread to over two-dozen countries.
"The spread of coronavirus is feared to badly impact the global economy," Rays Commodities' former chief operating officer Adnan Agar said while talking to The Express Tribune.
In Pakistan, gold touches record high at Rs93,400 per tola
Gold is likely to maintain the uptrend until the spread of the virus is stopped. "Bullion may test $1,670-1,680 an ounce under the current cycle of the uptrend. If the world fails to control the virus, gold may test $1,700-1,800," he added.
"Gold may face mild resistance at the first technical level of $1,670-1,680 per ounce."
Economic activity in China, the world's second-largest economy, has been drastically slashed to avoid the spread of the virus. "An estimated 70-80% of production capacity is staying shut in China since the outbreak of the virus," Agar stated.
Global stock markets, especially those of China and the US, are on a downward trend due to the impact of the virus on the world economy. "The yield of 30-year US Treasury bonds hit an all-time low today (Friday)," he said.
"American technology giant Apple - the second largest company in the world - is facing a significant drop in both supply and demand of its products since China remains its main production point and the main market as well," Agar said.
"Central banks of the US and China have been injecting billions of dollars into their respective economies to avoid economic collapse."
China has injected around $200 billion to keep its economy alive since the virus outbreak. Similarly, the US has pumped around $400-450 billion since October to stimulate its economy, which has been impacted due to the trade war with China.
"China's economy, which grew around 6% per year in the recent past, is feared to slow down to 3.5% this year due to the closure of production houses," he said.
Gold hits five-month high on escalating global tensions
Agar was of the view that the global economic slowdown and recession in some economies may spark a new wave of inflation and currency depreciation around the world. "Keeping these trends in view, international investors may continue to take fresh positions in gold."
All Sindh Saraf and Jewellers Association's member Abdullah Abdul Razzak stated that although gold hit an all-time high in Pakistan, its price still stood below cost. "Gold is cheaper by Rs2,000 per tola compared to its price in Dubai," he said.
"Gold is expected to maintain its uptrend…may soar to Rs96,000-97,000 per tola (in Pakistan) under the current cycle."
Published in The Express Tribune, February 22nd, 2020.