A tola now sells for Rs102,900
The gold price dropped by another Rs2,800 in Pakistan on Wednesday, according to rates shared by the All Sindh Saraf Jewelers Association. A tola of gold now costs Rs102,900.
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 price of gold has been falling since the emergence of several vaccines against the novel coronavirus. 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 negatively impacted 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 $1,650 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 $1,685 an ounce in the international market by the time this story was filed.
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.
The gold price 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. The per tola price in Pakistan peaked to Rs132,000 at the time.
Agar said the gold price will fall to a new low before bouncing back and then again fall a bit lower than the previous low in the coming days.
He said the US employment rate is expected to improve, which will also negatively affect the gold price in the coming week.
“But you never know precisely what’s going to happen for instance if the coronavirus situation aggravates, gold can again bounce back,” Agar said.