On Saturday, the price of gold in Pakistan fell by Rs1,000. According to the All Sindh Sarrafa Jewelers Association, a tola of gold may currently be purchased for Rs10,9200.
“The US economic data has revealed positive developments,” said Ahsan Mehanti, CEO and MD of Arif Habib Commodities. “Positive economic data strengthens the dollar, which negatively affects gold.”
“Moreover, the pandemic impact was now eroding off. The number of jobs is increasing. These factors are affecting the gold price,” he said.
The developments in the US affect gold price,” said Adnan Agar, operations director of AA Gold Commodities. “Negative news coming from big economies especially the US such as increasing deaths due to the pandemic or news of political instability such as riots push the gold price up. Positive news such as an increase in employment in the US negatively affects the gold price.”
Gold and other precious metals prices rise during times of uncertainty, such as wars and natural disasters, because they are regarded safe havens for investment. When steady times are forecast, their prices decline. When the economy and stock market appear to be unprofitable, investors resort to gold.
When the economy improves, however, investors tend to shift from gold and other commodities to the capital market. The condition in the United States, the world’s largest economy, has a significant impact on worldwide gold prices.
By the time this report was published, the gold price on the international market had dropped by $40 to $1,763 per ounce.
The international price of gold has an impact on local market pricing.
In the worldwide market, an ounce is used to measure gold, however in Pakistan, a tola is used. A tola weighs about a third of an ounce.
According to Agar, gold prices may fall another $20 or $30 before regaining stability as individuals begin to acquire it.
Agar went on to say that Bitcoin and other cryptocurrencies have drawn capital that would have previously gone to gold in times of uncertainty.
As countries throughout the world went into lockdowns in March 2020, the price of gold began to rise internationally. By August 6, 2020, it had risen from $1,471 to an all-time high of $2,063 per ounce.
At the time, the price per tola in Pakistan had risen to Rs132,000