Daily Times

Gold extended its consolidative price move for the third successive day on Thursday due to an over 3 percent downfall in the benchmark 10-year US Treasury bond yield amid risk aversion, providing a boost to the yellow metal.

As of 1255 hours GMT, gold in the international market was available at $1,839.40 per ounce, gaining $24.20 (+1.23 percent). Out of the $22.40 per ounce increase, +$13.80 was due to weakening of the US dollar and +$8.60 was due to predominant buyers, according to Kitco Gold Index. The price of 10 grams of 24-carat yellow metal in Pakistan, increased to Rs119,000 after gaining Rs3,200. Gold price in the local market remained Rs115,800 on Wednesday. An increase in the local gold prices was due to Pakistani rupee’s continuous depreciation against the US dollar during these days. The local unit has depreciated by 7.16 percent (Rs13.37) during the last nine sessions.

Amid the continuous depreciation of the rupee, experts expect that gold surge will continue as the local currency sinks. Gold has emerged as a safe asset during the ongoing economic crisis and people have been aggressively buying gold to protect their cash from deflation. The drop in the rupee value forced the gold trading body to revise up the bullion price significantly as Pakistan meets the local demand for the precious yellow metal through imports.

On the global front, concerns about softening global economic growth continue weighing on investors’ sentiment and benefit the safe-haven gold. The prospects for a more aggressive policy tightening by the Federal Reserve, Russia-Ukraine war and extended Covid-19 lockdowns in China have been fuelling recession fears. Apart from this, modest US dollar downticks offered additional support to the dollar-denominated gold. Apart from this, softening US bond yields influenced the dollar price dynamics and provided some impetus to gold.