Gold prices rallied over 2% on Friday after the rupee retreated, but the metal was set to end the week lower as persistent economic concerns boosted bullion’s safe-haven appeal.
Data released by All Sindh Sarafa Association showed that the gold price in Pakistan surged by Rs3,000 per tola and Rs2,572 per 10 grams to settle at Rs144,000 and Rs123,457.
The gold market has seen consistency in the last few days as the rupee rallied. However, the local currency resumed its downward slide, which lifted gold prices. Cumulatively, the price of yellow metal soared by Rs5,000 per tola in the last two sessions (Thursday-Friday).
Gold is considered a hedge against soaring inflation and uncertainties, but speculations of rising interest rates and rupee’s appreciation dampen its appeal by increasing the opportunity cost of holding the non-interest bearing asset.
In the international market, the price of yellow metal gained $3 per ounce to settle at $1,705 as the dollar paused while investors awaited key US jobs data, amid expectations the Federal Reserve would continue with steep interest rate hikes in coming months. It should be noted that the gold price stands below cost and is cheaper by Rs3,500 per tola compared to Dubai.
Meanwhile, silver prices in the domestic market surged by Rs10 per tola and Rs8.58 per 10 grams to settle at Rs1,480 per tola and Rs1,268.86 per 10 grams on Friday.