Gold prices fell on Friday as holders of long positions sold their holdings after 12 straight sessions of gains, but the outlook remained positive as long as prices remained close to record highs.
According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold dropped by Rs3,350 per tola and Rs2,872 per 10 grammes, settling at Rs177,300 and Rs152,006 respectively (APSGJA).
The traders had already planned for a market correction after the price of the valuable commodity reached new highs. On December 22, the price of gold reached an all-time high of Rs180,650 per tola.
Since December 1, gold prices have increased by Rs16,100, or 9.98% per tola, cumulatively, raising questions about whether the price increase is sustainable or represents a bubble.
Chand has been blaming speculators for taking gold prices to exorbitant rates. He said that contrary to the claims there is very less demand in the local market.
It should be noted that the APSGJA notifies the gold rates to the market every day after determining the price by keeping in view its rates in world markets, the rupee-dollar exchange rate, and demand and supply in domestic markets.
Analysts believe that the unavailability of the dollar in Pakistan and the widening difference between interbank and open market exchange rates triggered the recent price hike; however, grey markets of the precious commodity have also added fuel to the speculations.
Meanwhile, silver prices remained unchanged at an all-time high of Rs2,100 per tola and Rs1,800.41 per 10 grams, respectively.
In the international market, gold prices eked out gains ahead of a long holiday weekend as investors awaited US inflation data due later in the day that could offer some clues to the Federal Reserve rate-hike path. Prices settled at $1,797 after a decrease of $18 per ounce.
