Cryptocurrency correction meant return to precious metals
The per tola price of gold has increased Rs2,600 since April 13, according to data shared by the All Sindh Sarafa Jewelers Association. A tola now costs Rs104,600.
The per ounce price in the international market increased to $1,779 by the time this story was filed.
According to expert Adnan Agar, the correction or sharp decrease in cryptocurrency bitcoin’s price has been a major reason for the increase in gold.
“Investors were moving towards bitcoin, which was seeing its value increase. But now the bitcoin price has taken a correction, so investors are returning to gold,” Agar said.
The maverick cryptocurrency bitcoin has seen resistance from governments around the world because of its ability and nature to go unchecked. It unregulated by governments even in its international transactions.
Recently, the volatile bitcoin value dropped by over $15,000. It sank below the $48,000 level after increasing over $64,000 in just two weeks. Its value has recovered slightly to over $52,000 by the time this story was filed.
Agar added that coronavirus crisis in India has again improved its gold outlook. India is the second biggest consumer of gold, according to Agar.
The prices of gold and other precious metals go up 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 an economy and stocks. The same happened during when Covid-19 started to spread globally.
But on the other hand, when the economy starts improving, investors move to the 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.
The price of gold started going up 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. The per tola price in Pakistan peaked at Rs132,000 at that time.
Agar doesn’t see the price crossing $1,820 in the near future. He says that it could go down to $1,680 per ounce.