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Gold prices rise by Rs 360 per 10 grammes

24 August, 2012

KARACHI: Gold prices in Pakistan bullion market witnessed an incresae of Rs 360 per 10 grammes to saty at Rs 48,990 per 10 grammes Thursday on back of poor returns on bonds, no immediate signs of revival in the world's largest economies and higher gold buying by China, India and some European countries.

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KARACHI: Gold prices in Pakistan bullion market witnessed an incresae of Rs 360 per 10 grammes to saty at Rs 48,990 per 10 grammes Thursday on back of poor returns on bonds, no immediate signs of revival in the world's largest economies and higher gold buying by China, India and some European countries.

The yellow metal price in the international market fluctuated in the green zone as it rose by $25 and touched $1,666 an ounce to settle at $1,657.09 an ounce.

Dollar weakened amid speculation US Treasury and China might ease monetary policies to boost their economies, thus raising demand for the yellow metal.

Gold futures prices in India climbed to an all-time high of Rs 31,029 per 10 grammes. Rising demand in domestic markets for the wedding season also pushed gold futures to trade at a record high level, traders said.

Saleem Ahmad a metal expert in London said the gold being the safest haven for investment remained in focus besides high returns on investment and hedging became the driving force behind the rising prices of gold in the global markets.

Ahmad said the yellow metal became a strong instrument for investors as it started its upward journey in 2011 on strong demand by India and China besides international debt issues.

Over the last one year, gold prices in India have increased by 36 percent, in Pakistan 48 percent and this has been attributed to the poor outlook for global economy, rising inflationary pressure and weakness of the dollar against other major currencies.

The yellow metal will still be in the eyes of leading buyers and hedge masters around the globe including leading major gold investors in Pakistan, he added.

Hedging in gold is still on the higher side as it touched a new high around 77 percent in six months of 2012. The domestic sale of yellow metal registered a decline by around 70 percent in six months of 2012, though the demand was still there on wedding season but the customers curtailed volume of buying.

Meanwhile, the gold importers demanded of the government to announce duty cut on import of the commodity.

“Imports came down three times lower to 6.0 percent in July-August of fiscal year 2012-13, which previously stood at around Rs 2.15 billion import on daily basis,” an metal expert said.

The government should announce around Rs 100 per tola duty cut in order to lower its prices in the domestic market besides providing relief to exporters of gold ornaments in the international market. Currently the duty on import is around Rs 550 per tola and due to higher dollar value against the rupee, the local demand for the commodity is declining. The government should provide duty relief on three kilogrammes (kgs) imports of gold on every 10 kgs of jewellery exports.

Traders also said gold prices got a boost from speculative buying on expectations that central banks of different countries could start buying the precious metal.

End.


 
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