Gold rallies to new high

KARACHI: Gold prices hiked sharply by Rs300 per tola (11.7 grams) to Rs41,450 on Friday from its previous peak as the international bullion prices just fell shy of the $1,300 an ounce mark the same day. The ten grams rate of the yellow metal was Rs35,528, up by Rs257.

President of All Sindh Sarraf Jewellers Association Haroon Rashid Chand said that gold did not reach its true peak in Pakistan, as it was undervalued by Rs250 against the international prices.

However, he also said that local investors were beginning to show a little interest as earlier the precious yellow metal had been undervalued by Rs400 and more. The reduction in the gap compared to international rates highlights that investors have made some purchasing today (Friday).

The gold expert predicts that gold will continue to remain volatile in the coming days and may rise by a further ten to twenty dollars in the next two or three months.

Kamran Ansari, a gold shop owner at KDA markets, said that each time people learn that prices have hit an all-time high, he gets at least one customer who wants to sell her jewellery in exchange for money. He said that the consumers market was bare of customers as it continued to rise above the purchasing power of a common man.

The international bullion prices also recorded its peak of $1,298 an ounce on Friday. The prospects of the Federal Reserve resorting to new quantitative easing measures later in the year has sent US Treasury yields lower, with the dollar then tumbling. A weaker dollar and the prospects of commodity price inflation has served to underpin both gold and silver, as well as industrial metals.

Published in The Express Tribune, September 25^th, 2010.