A tola of gold is now for Rs132,000
KARACHI, AUG 07 (DNA) – Gold prices have continually increased and now a tola of gold is priced at Rs132,000 after an increase of Rs2500 on Friday, according to the All Sindh Sarafa Jewelers Association.
The new price hike has increased the yellow metal’s value by 50% as compared to its price only seven months ago when a tola cost Rs88,150. Rays Commodities COO Adnan Agar says that the current environment is favourable for gold prices and they may continue to rise, but not for long.
“I suspect a bubble has formed in gold prices and any news can trigger a massive correction in its prices. The correction may be big and if you ask me, it can be up to $250,” Agar said.
When the price of something like gold and stocks increase to apparently unrealistic levels and then they come down, experts call it correction in prices.
The international price of gold increased by $4 to reach $2,054 per ounce on Friday. He said that the last time the gold prices saw a huge surge was in 2011 when it reached a historic high of $1,920 then from $1,500 within two months.
“And within next one and a half year, it dropped it dropped drastically to $1048,” he said. He added that the prices of gold price per ounce stood at $1,250 last Eid, only a year ago. Agar suspects a correction in prices of gold may take place and news of a coronavirus vaccine may trigger it.
“Whenever the price of gold increases unprecedentedly, it also takes a big correction,” he said. “Gold isn’t like a stock of a company, which can see its value increase after it starts to get big orders, increases its revenues and subsequently it’s production units etc.
Such a company’s share may not come down unless the economy struggles for any reason like the emergence of coronavirus and a lockdown,” he said , adding that investors buy gold to hedge against uncertain times. When things return to normal, investors start to sell gold and its price comes down sharply, he said. = DNA
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