KARACHI: Gold price in Pakistan jumped over Rs1,500 per tola in Pakistan in line with the surge in the international market on the expectation that the US central bank could ease its pace of interest rate hikes “as soon as” December.
Data released by All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the gold price surged by Rs1,550 per tola and Rs1,329 per 10 grams to settle at Rs162,750 and Rs139,532, respectively.
It should be noted that gold prices in the local market are highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion.
Pakistan is a small market for gold at the global level. It meets the commodity’s demand through imports as it does not produce the precious metal locally.
Accordingly, the gold price for local markets is determined by keeping in view its prices in world markets, rupee-dollar exchange rate, and demand and supply in domestic markets. The latest price for local markets was determined to keep in view the prices at which trade took place among buyers and sellers.
In the international market, the price of the yellow metal surged by $20 per ounce settling at $1,780 as the dollar weakened on prospects of slower rate hikes from the Federal Reserve and signs of cooling US inflation.
Gold rates in Pakistan are around Rs1,000 below the cost compared to the rate in the Dubai market.
Meanwhile, silver prices in the domestic market surged by Rs30 per tola and Rs25.72 per 10 grams to settle at Rs1,770 per tola and Rs1,517.48 per 10 grams.