Gold snaps two-week rising streak

It comes despite rupee’s nosedive to an 11-week low at Rs225.65 vs US dollar

KARACHI:

Gold recorded its first major drop of Rs3,350 per tola (11.66 gram) to Rs177,300 in Pakistan, breaking an almost two-week-long streak of crazy gains almost every day despite the rupee’s maintained downtick on Friday.

The local currency slid by a fresh 0.09% (or Rs0.21) to an 11-week low at Rs225.65 against the US dollar in the interbank market, according to State Bank of Pakistan (SBP) data.

A drop in the rupee usually agrees with the gold pricing committee to revise the metal price as well, as the country meets the demand for the precious metal through imports in the US dollar denomination.

However, a drop in the commodity price in the international market by $18 per ounce (31.10 grams) to $1,797 was agreed on by the pricing committee to revise down the commodity price in Pakistan as well.

Pakistan has seen days in recent weeks when the bullion recorded a reduction in its price in international markets, but local pricing bodies (the All-Pakistan Sarafa Gem and Jewellers Association / APSGJA) kept ballooning the commodity price in the country amid high demand and low supply scenario for the metal.

The association President, Haji Haroon Chand said, “The other day the price has gone too high in Pakistan and there is the realisation that it should come down to make it affordable (for genuine buyers).”

The price of gold had jumped up by almost 10% (or net Rs16,100) per tola in the past three weeks (since December 1, 2022).

The rupee has posted a fresh loss after the country’s foreign exchange reserves dropped to almost a nine-year low at $6.11 billion and the global rating agency S&P downgraded Pakistan’s credit rating on Thursday.

A local research house said the rupee is expected to lose to Rs250 against the greenback by June 30, 2022, and to Rs263 by December 31, 2022.

Published in The Express Tribune, December 24^th, 2022.

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