Its per tola price has dropped to Rs107,200
The gold price dropped by Rs1,050 in Pakistan on Tuesday, according to rates shared by the All Sindh Saraf Jewelers Association. A tola now costs Rs107,200.
It has gradually been falling as several vaccines against the novel coronavirus have emerged. The vaccination process has begun in many countries, including the US.
Prices of gold and other precious metals increase during uncertain times such as wars and disasters as these are considered safe havens for investment. Their prices fall when stable times are expected ahead. Investors turn to gold when things don’t look in favor of the economy and stocks. The same happened during the Covid-19 pandemic.
“After US President Joe Biden resumed office, the gold price came under pressure,” said Akhtar Tessori, the chairperson of the All Pakistan Gems and Jewellery Traders and Exporters Association. “The Covid-19 vaccination process has also started so the price of gold will continue to drop.
“I see the international price of gold falling to $1,550 (per ounce) within a month. It means the per tola price of gold in Pakistan can fall below Rs95,000,” he said.
The gold price stood at $1728 an ounce in the international market by the time this story was filed. Gold prices in Pakistan respond to the yellow metal’s international price.
The precious metal may show volatility on a short-term basis but it will gradually lose its value in the long run since Biden has vowed for an expanded access to vaccines in the US, according to another expert, Adnan Agar.
“Furthermore, 2021 has been tipped as the year of recovery after a dismal 2020 for economies around the globe due to the Covid-19 pandemic,” he said.
The price of gold started increasing internationally as countries across the world went into lockdowns in March 2020. It rose from $1,471 to reach an all-time high of $2,063 an ounce by August 6.
“Whenever there’s a year of low economic growth, the next year is generally considered a year of recovery,” Agar said. “So, expectations are that economies will recover this year so the price of gold may go down.”
As the economy starts improving, investors move to capital market from gold and other metals.
The situation in the US, the biggest economy of the world, plays an important role in influencing gold prices globally.