KARACHI/LONDON: Domestic one tola and 10 gram gold prices on Friday hit fresh peak of Rs78,100 per tola and Rs66,958 per 10 grams, respectively, as international bullion prices surpassed $1,400 before retreating, still holding near a six-year high on the US central bank’s dovish stance on monetary policy.
Locally, gold prices saw a surge of Rs800 per told and Rs686 per 10 grams over Thursday’s rate.
All Sindh Saraf Jewellers Association (ASSJA) issued local rates based on $13 per ounce hike to $1,394 on the world markets.
Internationally, prices also found support from worries about a potential US military strike against Iran and a global trade conflict.
Spot gold rose 0.3 per cent to $1,391.84 per ounce as of 11:09 am EDT (1509 GMT).
Local prices surge to Rs78,100 per tola
Prices surged to $1,410.78 earlier in the session, a high not seen since early September, 2013, and were set to mark their best week in over three-years.
Bullion rates have jumped more than 5pc since the US Federal Reserve on Wednesday hinted interest rate cuts were possible later this year, as it responded to increased economic uncertainty and tepid inflation.
US gold futures dipped 0.1pc to $1,395.50 per ounce.
“Gold is seeing a continuation move from bullish comments throughout the week, most notably the fact that world central banks easing monetary policy is generally very supportive for commodities overall, particularly gold,” said David Meger, director of metals trading at High Ridge Futures.
Tensions in the Middle East have added support to the gold market, while the US-China trade war continues to concern investors, he added.
After initially approving military strikes against Iran in retaliation for the downing of an unmanned surveillance drone, US President Donald Trump pulled back from launching the attacks.
Gold is often considered a safe haven in times of political and economic uncertainty.
Gold prices traded within a wide range of $28.78, retreating from the more than $1,400 level touched earlier in the day.
“The levels above $1,400 are near term resistance, so you would not be surprised to see the market consolidate around this psychological level,” High Ridge Futures’ Meger said.
Oil gains after Iran tensions
Oil prices built on recent gains on Friday on fears any US military attack on Iran would disrupt flows from the Middle East, while a gauge of global stock markets hovered near seven-week highs following a run spurred by optimism over monetary policy.
Oil futures rallied on fears of a disruption to flows in the Middle East, which provides more than a fifth of the world’s oil output.
“A lot of the oil produced in the world comes from very troubled areas, and occasionally we get reminders of that,” said Gene McGillian, vice president at Tradition Energy in Stamford, Connecticut.
US crude rose 0.68pc to $57.46 per barrel and Brent was last at $65.15, up 1.09pc on the day.
Published in Dawn, June 22nd, 2019