The prices of gold are likely to shoot up as the buyers have thronged the local jewelry markets during the ongoing wedding season.
According to market sources, the gold prices will see a sharp increase of at least Rs 5,000 per tola (12 ounce) as the United States is stretching its military muscles to invade Syria for the latter allegedly having used chemical weapons against the Sunni rebels resisting the decades-old dictatorship.
Also, the fresh $6.64 billion IMF programme, which envisages Pak Rupee further depreciating against the dollar by Rs 110, is expected to jack the local gold prices up in the moths ahead.
According to traders, the US’s indecisiveness to attack Basherul Asaad regime coupled with the Federal Reserve Committee’s (FRC) reports on the country’s economic indicators was hanging the fate of international gold prices in abeyance.
The exporters say that from Thursday to Friday evening the gold prices eased down to $ 1,365 (per ounce) in the international market. The decrease was because of the FRC meeting wherein the body expressed satisfaction over favorable numbers on the unemployment rate in America.
“This positive brought down gold prices on the local market by around Rs 550 per tola,” said an exporter. On Friday, per tola gold in the local market closed at Rs 54,600.
However, fear for a possible US attack on Syria kept the market sentiments volatile that pushed the gold prices up on Saturday. “On Saturday, the international gold prices again moved upward and stood at $ 1,390,” the exporter added.
This increase, he said, reflected on local prices that swelled to Rs 54,950, registering a rise of Rs 350.
Haroon Chand, president All-Sindh Sarafa Association, says the market was not so significantly changing and the current price-hike of a few hundreds was not so noteworthy. “We call it significant when a major change, like ranging from Rs 2,000 to 3,000 (per tola), takes place,” the jeweler told Pakistan Today.
However, an exporter, who also trades the precious metal locally in main Sadar market, said gold prices in the country were bound to skyrocket if the US attacked Syria.
“Presently, the market is quite uncertain as you never know what unfolds in the next few days,” he said. The exporter said if Syria was attacked the gold in international market would peak by $ 100 to $150 to stand at $ 1,450.
“This would lead to an increase of at least Rs 5,000 in per tola gold prices in Pakistan. The price would then be around Rs 60,000. It may go even beyond,” he speculated.
This, however, may happen within next one and a half month, he said. The local inflation-hit buyers, the exporter said, would be adversely impacted with the likely price hike given the ongoing wedding season in the country.
“The wedding season is going on so there is lot of activity in the market. Buyers have thronged the market,” he said.
In addition, the exporters also foresee a significant growth in local gold prices if the rupee further devalued against the greenback, as has been envisaged by the IMF under its new bailout package.
“Local gold prices depend on the rupee’s conversion rate against the dollar. If the dollar is stronger and the rupee is weaker it certainly reflects on the prices of gold,” the exporter said.
