KARACHI: Donald Trump’s victory in the US presidential election continued to impact global commodity markets as the world gold rate plunged by a record $77 per ounce to $2,593 on Tuesday.
As a result, local prices for 10-gram and one-tola of gold fell by Rs6,000 and Rs7,000 to Rs231,911 and Rs270,500, respectively, announced All Sindh Saraf and Jewellers Association (ASSJA).
It was the second major downward price correction since Trump’s win. Last week, the price of 10-gram and one-tola gold (24kt) fell by Rs4,630 and Rs5,400, respectively, owing to a steep drop of $65 per ounce on the world markets.
Jewellery buyers may have found some relief from these price drops. On Oct 30, local rates for 10-gram and one-tola surged to an all-time high of Rs246,828 and Rs287,900 per tola, respectively. This spike was driven by a $29 per ounce increase in the international price of gold, which reached $2,784 per ounce.
Factors contributing to this rise included escalating tensions in the Middle East, declining interest rates, and increased purchases of gold as a safe haven by investors.
Investments in gold in Pakistan increased due to rising prices, but the declining trend must have shifted the investors’ mindset.
Topline Securities Chief Executive Mohammed Sohail said that account openings at the Pakistan Stock Exchange have doubled due to recent record-breaking rallies, driven by a continued downward trajectory in interest rates.
He claimed that many people have moved their fixed-income funds to the equity market due to economic stability and falling interest rates.
Pak Kuwait Investment Company Head of Research and Development Samiullah Tariq said, “I think a lot of people have switched to crypto and the stock market.”
The 10-gram and one-tola gold rates in January were Rs188,357 and Rs219,700, respectively, while the world gold price was $2,082 per ounce. The rates are still pricier by Rs43,554 and Rs50,800 and $511, respectively.
Published in Dawn, November 13th, 2024
