The price per tola of gold has jumped Rs4,700 since August 11, according to rates compiled by the All Sindh Sarrafa Jewelers Association. A tola of gold will now cost Rs112,300.
The price per tola of gold went up by Rs1,300 on Saturday alone. The international price for an ounce of gold moved up by almost $100 from August 10 to $1,827 currently.
An ounce is a metric used to quantify gold in the international market, while the tola is used in Pakistan. A tola is approximately one-third of an ounce. Gold prices follow the same pattern in the international market and the Pakistan market but the change doesn’t always reflect accurate changes.
“The recent hike in gold prices was due to bad US employment data,” said Adnan Agar, who is the operations director of AA Gold Commodities. “The forecast was for 800,000 jobs but only 250,000 jobs were actually created.”
“Negative news coming from big economies, especially the US, such as increasing deaths due to the pandemic or news of political instability such as riots, push the gold price up. Positive news such as an increase in employment in the US negatively affects the gold price.”
The price of gold and other precious metals go up during uncertain times such as wars and disasters as they are considered safe havens for investment. Their prices fall when stable times are expected ahead. Investors turn to gold when the economy and stock market do not seem lucrative.
On the other hand, when the economy starts improving,
investors tend to switch to the capital market from gold and other metals. The
situation in the US, the biggest economy in the world, plays an important role
in influencing gold prices globally.
Agar is of the view that the dollar against other currencies has weakened to a level where buying will start again, which means the dollar will strengthen.
“Dollar and gold are inversely proportional. When the dollar weakens, gold prices go up. When the dollar strengthens, gold price goes down,” Agar explained.
“So, I think gold rates won’t go up much and would soon be settling around $1,800 per ounce,” he wagered.
The price of gold started going up internationally as countries went into lockdown in March 2020. It rose from $1,471 to reach an all-time high of $2,063 an ounce by August 6, 2020. The per tola price in Pakistan rose to Rs132,000 at the time.