Gold rebounds Rs24,000/tola

Swings wildly, rebounds strongly after heavy sell-off, settles at Rs514,362; rupee stable

KARACHI:

Gold prices in Pakistan rebounded sharply on Tuesday, tracking a strong recovery in the international bullion market after several sessions of steep losses that had rattled investors and traders.

In the local market, the price of gold per tola surged by Rs24,000 to settle at Rs514,362, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10-gram gold rose by Rs20,576 to Rs440,982.

The sharp rebound came a day after gold had suffered a significant decline. On Monday, gold per tola had fallen by Rs21,500 to close at Rs490,362. Overall, the yellow metal had lost a cumulative Rs85,500 per tola over the previous three sessions, reflecting heightened volatility in global markets.

Internationally, gold prices jumped by $240 on Tuesday to reach $4,916 per ounce, including a premium of $20. The recovery followed a dramatic sell-off in recent days, during which gold experienced unusually wide price swings.

Commenting on market condition, Adnan Agar, Director at Interactive Commodities, said the gold market was witnessing extreme volatility that posed serious risks to investors. He noted that gold had seen a downward move of nearly $1,200, hitting a low of around $4,440 and a high close to $5,600 within a short span.

"After such a massive drop, if the market increases by $300, $400 or even $500, it is understandable," Agar said. However, he cautioned that daily price movements of $200 to $300 were unhealthy for the market. "Ideally, movements of $70 to $100 would be much more stable. These large swings are very dangerous, cause losses to clients and increase overall uncertainty."

Agar added that while volatility had persisted since the recent downturn, there were expectations that market conditions might gradually stabilise in the coming days. Much would depend on the upcoming US economic data and broader geopolitical developments.

He pointed out that gold could face downward pressure as concerns over a potential US government shutdown appear to be easing after reports that a deal has been reached. Additionally, upcoming negotiations between Iran and the United States, scheduled to begin later this week, could influence market sentiment. While immediate breakthroughs are unlikely, prolonged talks may reduce geopolitical risk premiums in the near term.

Meanwhile, silver prices in Pakistan moved higher, with the price per tola increasing by Rs741 to settle at Rs9,146.

The Pakistani rupee recorded a marginal uptick against the US dollar in the inter-bank market on Tuesday. By the close of trading, the local unit settled at 279.75 per dollar, appreciating by Rs0.01.