Gold prices, rupee value drop slightly

Bullion's price falls by Rs800/tola on global trends; currency slips by 0.02%

KARACHI:

Gold prices in Pakistan fell on Monday, mirroring a decline in the international market. The price of gold per tola in the local market dropped by Rs800, settling at Rs277,000. This follows a significant Rs5,000 drop per tola in the previous trading session. On the global front, gold prices fell by $8 per ounce, with the international rate standing at $2,658 per ounce, as reported by the All-Pakistan Gems and Jewellers Sarafa Association.

Adnan Agar, Director at Interactive Commodities, analysed market trends and projected fluctuations in gold prices amidst global changes. He emphasised that the US Federal Reserve's upcoming policy announcement could significantly influence the direction of gold prices. With expectations of an interest rate cut, gold prices might experience further adjustments.

Agar explained that while Pakistan's recent monetary policy decisions, including an interest rate cut, will impact the rupee-dollar exchange rate and, indirectly, gold prices, the effect remains minimal compared to the influence of US policies. He noted that the appreciation of Pakistan's rupee typically occurs in fractions (paisa), whereas depreciation happens in multiples of rupees, limiting its impact on gold rates.

Meanwhile, the rupee experienced a slight decline against the US dollar, slipping by 0.02% in the inter-bank market on Monday. By the close of trading, the currency stood at 278.17, reflecting a decrease of Re0.05 against the greenback

Zafar Paracha of ECAP, stated that the rupee is expected to strengthen following the recent policy rate cut of 200 basis points to 13%. However, he criticised the government for holding back the rupee's appreciation to favour exporters. He argued that overseas Pakistanis and exchange companies should be included under the export category and provided with similar incentives.