Gold rebounds on geopolitical tensions

Rupee weakens despite current account surplus

KARACHI:

Gold prices in Pakistan surged by Rs3,600, or 1.33%, on Tuesday, closing at Rs273,500 per tola, driven by escalating geopolitical tensions in Europe. This marks a net rebound of Rs7,100, or 2.66%, in under a week, according to the All Pakistan Sarafa Gems and Jewellers Association.

Globally, gold prices rose by $36 on Tuesday, bringing the total increase to $71 within a week, reaching $2,623 per ounce. The yellow metal had earlier dipped by Rs21,500, or 7.5%, in the first two weeks of November, after hitting a record high of Rs287,900 per tola in late October 2024.

Speaking to The Express Tribune, Interactive Commodities Director Adnan Agar attributed the rebound to limited escalation in the Russia-Ukraine conflict. Ukraine recently launched US-made missiles on Russia after Whittington allowed Kyiv to do so, escalating tensions, though the attacks caused limited damage. Agar predicted gold's price trajectory would hinge on further developments in the conflict, with prices expected to trade between $2,560 and $2,670 per ounce in the short term.

"Gold will likely maintain its uptrend if tensions persist, but could resume a downturn if the situation stabilises," Agar said, adding that the likelihood of de-escalation increases as winter approaches.

Rupee weakens slightly

Meanwhile, the Pakistani rupee depreciated by Rs0.09, closing at Rs277.95 against the US dollar in the interbank market, amid rising import demand for the greenback. Over the past two days, the rupee has cumulatively dropped by Rs0.28, according to the State Bank of Pakistan (SBP).

In the open market, the Exchange Companies Association of Pakistan (ECAP) reported a Rs0.06 drop, with the rupee closing at Rs278.88 per dollar.

The rupee's decline comes despite positive economic indicators, including a $349 million current account surplus in October and a cumulative surplus of $218 million for the first four months of FY25. Analysts project the rupee will remain stable between Rs277 and Rs279 against the dollar through December 2024.