Business
Gold rate dips by Rs300 per tola to Rs256,500
The price of 10 grams of 24 karat gold also decreased by Rs258 to Rs219,907
Islamabad: The per tola price of 24 karat gold decreased by Rs300 and was sold at Rs256,500 on Monday compared to its sale at Rs256,800 on last trading day.
The price of 10 grams of 24 karat gold also decreased by Rs258 to Rs219,907 from Rs220,165 whereas the prices of 10 gram 22 karat gold went down to Rs201,582 from Rs201,817, the All Sindh Sarafa Jewellers Association reported.
The price of per tola and 10 gram silver remained constant at Rs2,900 and Rs2,486.28 respectively.
The price of gold in the international market decreased by $16 to $2,427 from $ 2,443, the Association reported.
Gold prices fell more than 2% in volatile trading on Monday as investors liquidated positions in tandem with a broader equities selloff, though analysts said bullion’s safe-haven appeal remains strong as U.S. recession fears mount.
Spot gold was down 2% at $2,393.66 an ounce by 1139 GMT. U.S. gold futures lost 1.4% to $2,434.10.
“There’s some truth in the old chestnut that all correlations go to one in a crash, and with traders needing to liquidate winning positions to cover margin calls on other assets, gold’s volatility signals the level of panic hitting equity markets,” said Adrian Ash, director of research at Bullionvault.
Stock markets tumbled, with Japanese shares exceeding their 1987 Black Monday loss at one point, as fears of a U.S. recession prompted investors to offload risk assets.
Asia gold: India premium drops as buying moderates; China demand lags
Data on Friday showed that the U.S. unemployment rate jumped to 4.3% in July, raising the likelihood of a Federal Reserve cut to interest rates in September, with markets now expecting the central bank to cut by as much as 50 basis points.
“Elevated geopolitical tensions and recent hopes for even greater Fed rate cuts should create supportive conditions for bullion. Ultimately, gold should be able to post a new record high once nerves settle,” said Han Tan, chief market analyst at Exinity Group.
Bullion, often used as a hedge against geopolitical and economic risks, thrives when interest rates are low.
Prices of other precious metals also slumped as recession worries dampened the demand outlook.
Spot silver was down 5.7% at $26.92 while platinum fell 4.1% to $918.35 and palladium lost 4.5% to $849.05 after hitting its lowest since August 2018.
Platinum and palladium, both used in engine exhausts to reduce emissions, have come under pressure from the long-term risk presented by the transition to net zero emissions.
However, there are massive short positions that will eventually be unwound, so there is a good chance that both will reach around $1,000, said StoneX analyst Rhona O’Connell.