Pakistan’s gold price stops going up and down sporadically.
Gold prices stopped going up in Pakistan on Monday because investors who wanted a safe place to put their money were worried that the government would raise taxes and end subsidies in order to get back on the International Monetary Fund’s (IMF) loan programme.
The All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) said that the price of gold (24 carats) went down by Rs800 per tola and Rs686 per 10 grammes to settle at Rs197,600 and Rs169,410, respectively.
Dealers said that a sharp drop in sales could push prices even lower, but a drop in the demand for gold imports could help reduce the country’s huge trade deficit and keep the rupee stable.
As the Pakistani rupee trades between 269 and 275 to the dollar on the interbank market, the price of gold could go up a lot if the country imports all the gold it needs. The country is already having trouble with its balance of payments.
Gold prices went down on Monday because the dollar got stronger and traders closed out their positions before the U.S. inflation data came out on Tuesday. This data could change the Federal Reserve’s plan for when to raise interest rates.
As of 06:53 GMT, spot gold was down 0.1% to $1,863.38 per ounce, while US gold futures climbed 0.1% to $1,876.90.
Bullion is often seen as a way to protect against inflation, but when interest rates are raised to fight inflation, it costs more to hold it.
Yeap Jun Rong, a market analyst at IG, said, “A stronger US dollar and higher Treasury yields continue to put pressure on gold prices as hopes for a long period of disinflation are challenged.”
The dollar index went up by 0.1%, making it more expensive for people with other currencies to buy bullion priced in dollars. The yield on the benchmark 10-year note was close to its highest level since January 6.