Local gold prices record slight rise, global rates witness sharper hike

Gold prices witnessed a rise in the international market owing to uncertainty regarding the United States’ (US) position on tariffs, depreciation of the US dollar and ongoing Russia-Ukraine ceasefire talks. As per reports, domestic gold prices did not shift significantly, as the price of one-tola 24k gold increased by a marginal Rs300.

According to details released by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), per tola gold rates have inched up to Rs342,800. The price of a 10-gram 24k increased by Rs257, coming to rest at Rs293,895.

However, details from reports suggest that the commodity is trading below the aforementioned prices in domestic gold and sarafa markets. One-tola gold is fetching Rs341,350 in local markets, with 10 grams being sold for approximately Rs292,658. This phenomenon is fairly common as prices quoted by APSGJA and domestic gold rates differ slightly at times. 

The price of gold in the domestic market rallied sharply on Monday, recording a Rs4,000 gain per tola. A director of a reputable commodities institution has reportedly highlighted that gold trading stayed muted throughout the day.

As per reports, the director outlined the trends in the international bullion market, mentioning how gold hit a low of $3,206 per troy ounce (t oz). Currently, the price of the commodity is resting at approximately $3312 per t oz.

According to analysts, $3,250 and even $3,200 could be key support levels for the commodity if prices begin to fall. As per reports, comments by analysts outlined how a close above $3,300 could result in a “bullish breakout”.

The price of gold in the international market rose by over one percent on Tuesday, owing to a depreciation of the dollar. The strength of the dollar and gold prices are inversely related, meaning that gold prices surge when the dollar depreciates.

Reports reveal that the cause of the dollar’s depreciation was a consequence of Moody’s, a renowned credit rating agency, downgrading the economic superpower’s sovereign rating. Moody’s downgrade, coupled with the Federal Reserve displaying caution, triggered a large sell-off as many perceived that it was riskier to hold onto dollars.

Reports attribute uncertainty related to tariffs and the Russia-Ukraine ceasefire negotiations as another factor causing gold prices to rise. This is because gold is perceived by many as a safe haven asset, and with uncertainty on the rise, many prefer to hold onto gold given its historic status of being a store of value.