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Gold price falls by Rs250 in Pakistan

The price of gold in Pakistan decreased by Rs250 per tola and Rs214 per 10 grams to settle at Rs130,000 per tola and Rs111,454 per 10 grams, respectively.

A day earlier, the precious commodity closed at Rs130,250 per tola and Rs111,668 per 10 grams.

Cumulatively, the safe-haven asset lost Rs750 or 0.57% per tola during the week ended March 19. Meanwhile, in the international market gold extended losses recording a decline of $11 per ounce to settle at $1,921.

Globally, gold was on track for its biggest weekly drop in nearly four months on Friday, after the demand for the safe-haven metal was hit by hopes of progress in peace talks between Russia and Ukraine as well as the fallout from a US interest rate hike.

The dollar jumped against its rivals, making bullion more expensive for overseas buyers.

“We have seen the invasion-driven momentum and speculative fury (for gold) massively cool off over the past 10 days,” said David Jones, chief market strategist at Capital.com.

Bullion is down 2.8% this week as optimism over the peace talks lifted sentiment in wider financial markets, denting demand for safe-haven assets.

“If there is a ceasefire or some sort of a deal, gold could drop fairly quickly,” said Edward Meir, an analyst with ED&F Man Capital Markets.

Earlier this week, the Federal Reserve raised its benchmark overnight interest rate by a quarter of a percentage point and forecast an aggressive plan to push borrowing costs to restrictive levels next year. read more

Higher interest rates tend to raise the opportunity cost of holding non-interest paying gold.

Gold rates in Pakistan are around Rs5,500 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,500 and Rs1,286 today.

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