Gold rises on political uncertainty in Pakistan

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KARACHI: Gold continued to glitter in Pakistan on Wednesday on political worries, but was trading in a tight range in the absence of any fresh clues ahead of the PTI’s long march and as the market looked to economic cues for more direction.

The price of the precious metal rose by Rs1,800 per tola and Rs1,542 per 10 grams to settle at Rs150,200 and Rs128,772, data released by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed.

Gold is often seen as an alternative investment during times of political and financial uncertainty. Cumulatively, the precious commodity has gained Rs3,800 per tola during the last two sessions.

The 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.

In the international market, the price of the yellow metal surged by $24 per ounce settling at $1,668 as the dollar and bond yields weakened amid expectations that the US Federal Reserve could slow its rapid pace of interest rate hikes.

While the Fed is still widely expected to deliver a rate increase of 75 basis points in November, it is also likely to debate how much higher it can safely push borrowing costs.

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 Rs1,000 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.