LAHORE: Gold prices remained stable in both the international and local markets, with the domestic bullion trade recording no change over the session.
According to the All Pakistan Sarafa Association, and under the influence of the international market, 24-karat gold in the country remained unchanged at Rs483,036 per tola, while the price of 10 grams of gold also held at Rs414,125.
The price of silver in the country rose by Rs180 per tola to Rs7,509. In the international market, the association reported gold per ounce holding steady at $4,605.
Internationally, however, the picture was one of mild retreat. According to foreign news agencies, spot gold fell by 0.5 percent to $4,576.30 per ounce, while US gold futures also declined by 0.8 percent to $4,629 per ounce.
Gold had climbed earlier in the week to its highest level in more than three months, but investors have since adopted a cautious posture amid uncertainty over US monetary policy and the future direction of interest rates.
Attention is now centred on the address by US Federal Reserve chairman Kevin Warsh at the Jackson Hole symposium, which is regarded as significant for signalling the future direction of American interest rates.
Analysts said that if the Federal Reserve chairman signals in his speech an intention to maintain a tight monetary policy or keep interest rates elevated, further pressure could follow on the price of gold. During periods of high interest rates, gold becomes comparatively less attractive to investors because it generates no regular yield.
Inflation in the US economy remains a significant challenge for the Federal Reserve. According to the latest figures, the Fed’s key inflation gauge was recorded at 3.7 percent over the 12 months to July, keeping uncertainty alive in the market regarding future changes in the policy rate.
Analysts nevertheless point to several factors supporting the price of gold over the longer term. These include growing investor interest in gold exchange-traded funds and futures, concerns relating to the US fiscal position, and continued gold purchases by central banks around the world.
Other precious metals also showed a negative trend. Silver declined by one percent to $68.54 per ounce, palladium eased by 0.8 percent to $1,339.84 per ounce, and platinum fell by 0.6 percent, heading toward a loss on a weekly basis.
While further volatility is considered likely in the short term, some analysts continue to maintain the possibility that gold could move toward crossing the $5,000 per ounce level in the international market in future.
The relationship between local and international prices is arithmetically direct. Domestic bullion rates are derived from the international dollar price converted at the prevailing exchange rate and adjusted for local premiums, which is why the rupee’s stability has kept tola prices flat even as the international quote has fluctuated. At the reported tola price, the implied per-gram rate is consistent with the quoted 10-gram figure, one tola being equivalent to 11.664 grams.
For Pakistani households, gold functions less as a traded asset than as a store of value and a fixture of wedding-related expenditure, which means sustained price increases translate into pressure on family budgets well beyond the investment market.
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