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Gold expected to rise in Pakistan after Eid

Gold’s price in Pakistan may also go up

SAMAA | - Posted: May 10, 2021 | Last Updated: 2 months ago
SAMAA |
Posted: May 10, 2021 | Last Updated: 2 months ago

The price of gold is on the move again in the international market, hitting $1,835 with experts saying it could go up further when markets open next week in Pakistan.

All Sindh Sarrafa Jewelers Association last shared rates on Saturday. A tola was valued at Rs106,000. Markets will now open next week on Monday after the extended Eid holidays.

The association’s Haroon Chand said that the price in Pakistan can be expected to rise by Rs1,000 or Rs2,000 when the market re-opens.

Another expert, Adnan Agar, said that the price at the Pakistan Mercantile Exchange (PMX), which is linked with the international market, was showing Rs108,000 for a tola.

“If the gold price goes up further in the international market during the week, it can even go up by Rs3,000 to Rs4,000,” Agar said.      

But All Pakistan Gem and Jewellery Traders and Exporters Association Chairperson Akhtar Tessori said that the demand in the country is very low and it may not go up despite price increases in the international market.

“Gold has been selling at around Rs2,000 to Rs5,000 under-cost in Pakistan during the last one year because of low demand. So, I think it may not go up when the market opens in Pakistan after Eid holidays,” he said.

When gold sells below its international price in the country, it is said to be selling at an under-cost.

Agar says the price may go up to $1,855 per ounce in the international market before taking a correction and may come down to around $1,810. When the price of a commodity or a stock goes up, investors begin to sell to make a profit. In the process, the price comes down, which is known as a correction.   

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 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.

Agar said that the recent gold price rise was due to unattractive US employment data.

“The market expected that there would be 900,000 jobs created in April in the US. But actually, it only came out to be 200,000. That helped gold jump,” he said.

He added that a weakening of dollar has also been a reason for an increase in gold. The US dollar weakened because of a government stimulus packages given to buttress the economy amid the pandemic.         

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.

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