The Rs800 increase comes after a week of declining trend
The gold price in Pakistan rebounded on Tuesday after showing a declining trend for eight consecutive days. It recorded an increase of Rs800 to reach Rs112,100 per tola, according to rates compiled by All Sindh Saraf and Jewelers Association.
The price of gold had been falling for a while and it had recently dropped to a two-month low.
Adnan Agar, the director of AA Commodities, had already predicted the increase in gold price. The factors that tend to swell gold and other metals were still intact, he believed.
The international price of gold appreciated to $1,887 per ounce by the time of filing of this story. The gold prices started increasing internationally as countries across the world went into lockdowns in March due to the Covid-19 pandemic. It rose from $1,471 to reach an all-time high of $2,063 by August 6.
Agar says only the development of Covid-19 vaccine and its distribution around the world would bring down the prices of gold and other precious metals. All metals respond similarly to such global situations.
The recent fall in gold price was because of consolidation or profit-booking, according to the analyst. Whenever the price increases quickly, people start selling to book profits. This, in turn, brings the prices down.
About the future prospects of gold, Agar says he doesn’t see the precious metal losing its appeal anytime soon.
“I think it will take one to two years for the precise development of vaccine, its production and distribution,” he told SAMAA Money. “Only an announcement of a vaccine may not have a significant impact on gold price.”
There is still significant number of coronavirus cases around the world, including the US, Europe and India, he notes.
The US may also have one of its most controversial elections in November as Donald Trump has suggested that he won’t accept a defeat.
Agar says the US election itself, and the possibility of a controversial one, adds to political uncertainty. It can cause the gold price to rise because of the safe-haven appeal to investors.
“The gold price must be closely followed for the next three months as it can be highly volatile,” he suggested.