Sheds Rs1,900 a tola
The price of gold has been falling across the world. Apart from the improving Covid-19 situation, maverick cryptocurrencies have been affecting it too. Almost all governments in the world have disowned cryptocurrencies.
The per tola price of gold dropped by Rs1,900 in Pakistan on Thursday, according to rates shared by the All Sindh Saraf Jewelers Association. A tola of gold lost its price by Rs4,050 during the last three days and is now priced at Rs104,200.
The price of gold has gradually been falling as several vaccines against the novel coronavirus have emerged. The vaccination process has begun in many countries, including the US.
But commodities expert Adnan Agar says that gold is not losing its value only to the improving Covid-19 situation. Cryptocurrencies, especially bitcoin, have been attracting investment too, which has also negatively affected the gold price.
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.
Agar said the price of bitcoin has increased in the recent past, bringing it in competition with gold and other precious metals, which are traditionally considered safe havens for investment.
But the expert doesn’t expect the gold price to fall below $1,680 an ounce in the international market before bouncing back a bit. Gold prices in Pakistan respond to the yellow metal’s international prices.
The gold price stood at $1,715 an ounce in the international market by the time this story was filed.
But another analyst who closely follows the gold price doesn’t agree with Agar on where the price of gold would settle.
“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,” said Akhtar Tessori, the chairperson of the All Pakistan Gems and Jewelery Traders and Exporters Association.
“After US President Joe Biden resumed office, the gold price came under pressure. The Covid-19 vaccination process has also started, so the price of gold will continue to drop.”
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.
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.