Gold prices drop to Rs 338,800 per tola

Gold prices took a tumble on Monday, momentarily ending the hot streak the precious metal was on. As per credible reports, an upward trend had been witnessed over several sessions, pushing the price of the commodity to a record high of Rs 340,600 per tola on Saturday.

However, gold was unofficially trading as high as Rs 345,000 per tola in the domestic market, as many believed that the commodity was poised to appreciate even more, given international geopolitical factors. With the US-China trade war escalating, gold’s status as a safe haven investment improved, causing the metal to summit new peaks.  

Data from the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA) indicates that the value of one tola 24 karat gold now sits at Rs 338,800 after witnessing a fall of Rs 1800. The price of 10 grams 24 karat gold recorded a fall of Rs 1543, coming to rest at Rs 290,466.

Gold prices in the international market have fallen marginally as well. As of reporting, the price of gold across various trading platforms stood at approximately $3223.57 per troy ounce (including a premium of $20, recording a drop of $12.49). However, many believe that the price of gold could resume its climb if tensions build up between the US and China. 

Analysts believe that market corrections are in effect now, pushing the value of gold downwards after the commodity peaked. Reports reveal that the price of the yellow metal rose unrestricted by approximately 10 percent in under a week.

While the price of the commodity sits comfortably above $3200 per troy ounce, analysts have reportedly suggested that it could ‘test further support zones’ as low as $3,050 per troy ounce. 

However, the price of gold may not deviate substantially as trading activities in the international market are likely to witness a drop owing to market closures amid holidays for Easter weekend and Good Friday. Until markets resume trading activities, trading volumes are unlikely to post any remarkable jumps.

The drop in gold prices comes despite the rupee recording a depreciation against the greenback. A weaker rupee implies that the price of gold should rise. 

However, international trends have proven to be more powerful, allowing for the price of gold to log a drop. Had the rupee held steady, gold prices would have recorded an even sharper fall.