Gold prices in Pakistan drop after reaching peak

April 05, 2024 (MLN): Gold price in Pakistan retreated after reaching its new all-time high of Rs241,100 per tola in the previous session.

The key benchmark 24-karat gold witnessed a drop of Rs900 per tola today and was sold at Rs240,200, still higher than its previous all-time high of Rs240,000 observed on May 10, 2023.

It is crucial to note gold has not yet reached its all-time intraday high, as according to the Karachi Sarafa Association, the highest intraday price recorded is Rs242,700.

The rally currently being witnessed in the domestic bullion extends from March in which the yellow metal gained a substantial Rs19,100 in line with the surge in international gold prices.

The association further reported that the price of 24-karat gold reached Rs205,932 per 10-gram, up Rs772 compared to the last session.

Similarly, the price of 22-karat gold was quoted lower at Rs188,772 per 10-gram.

On the global front, international spot gold snapped its seven-day-long winning streak as its price dropped by 0.38% in the previous session.

This retreat in international rates is due to the expectations for lower U.S. interest rates this year, as investors await more clarity on the timing of the cuts.

"It's a continuation of the idea... propagated by the Powell speech the other day that the Federal Reserve is getting set to cut rates," said Bart Melek, head of commodity strategies at TD Securities, as Reuters reported.

"That typically is a very accretive thing for gold, particularly since it looks like they (the Fed) are quite prepared to reduce interest rates at a time where inflation is going to be significantly above their 2% target."

Fed officials including U.S. central bank chief Jerome Powell on Wednesday continued focusing on the need for more debate and data before interest rates are cut, a move financial markets expect to occur in June.

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