Gold price rises in Pakistan on festive demand

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KARACHI: Gold demand in Pakistan, a small market for gold at the global level, rose on Monday as key festivals and the wedding season boosted the appeal for the yellow metal.

Data released by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of the precious metal declined by Rs1,300 per tola and Rs1,115 per 10 grams to settle at Rs147,700 per tola and Rs126,629 per 10 grams, respectively.

Cumulatively, the precious commodity has lost Rs950 per tola during the week ending October 22.

Pakistan is a small market for gold at the global level. It meets the commodity’s demand through imports as it does not produce the precious metal locally.

Accordingly, the gold price for local markets is determined by keeping in view its prices in world markets, rupee-dollar exchange rate, and demand and supply in domestic markets. The latest price for local markets was determined to keep in view the prices at which trade took place among buyers and sellers.

On the physical side, demand for gold in Pakistan picked up pace this week as some consumers bought into a retreat in domestic prices as the wedding season kicks off.

In the international market, the price of the yellow metal declined by $11 per ounce settling at $1,647 as the dollar climbed, while investors looked for hints on a shift in Federal Reserve monetary policy which has so far kept a leash on bullion prices. 

Gold is sensitive to rising interest rates, which increase the opportunity cost of holding bullion that does not pay interest. The precious commodity’s rates in Pakistan are around Rs700 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,580 per tola and Rs1,354.60 per 10 grams.