KARACHI: Gold prices dropped over 3% to a near two-and-a-half-month low on Tuesday as investors scrambled for cash to cover losses in other asset classes mainly driven by an appreciation of the rupee against the US dollar after the International Monetary Fund (IMF) approved the revival of Pakistan’s bailout programme.
In data released by the All Sindh Sarafa Association, the gold price plummeted by Rs5,100 per tola and Rs4,372 per 10 grams to settle at Rs140,500 per tola and Rs120,456 per 10 grams on Tuesday.
Bullion has on occasion moved in tandem with equities recently, especially as sharp sell-offs in wider markets force investors to sell precious metals to meet margin calls and cover their losses.
Read more: Bears in PSX as 100-index sheds 309.09 points
Gold, considered a safe store of value during political and financial uncertainty, has been facing tough competition from another safe haven, the dollar, in which it is priced.
A stronger dollar makes gold expensive for holders of other currencies and while the greenback lost ground in the local market it has been strengthening against other currencies for the last many days.
