Commodity trading: Gold expected to climb back up, says PMEX’s head

Karachi: There is going to be minimal downside to gold trading, as the fall of its prices is expected to be over by September, according to Acting Managing Director of Pakistan Mercantile Exchange (PMEX) Amjad Khan.

“Gold will be a very good trade by the end of 2013, as the current spell of declining gold prices is likely to end quite soon,” Khan said while speaking to The Express Tribune in a recent interview.

Gold is considered to be a mirror image of the dollar, which means its value declines if the dollar gains strength. With the indication from the US Federal Reserve that it is now going to print less money, dollar interest rates have gone up globally. This has resulted in disinvestments from gold, reducing the price of the precious metal internationally.

In the domestic market, the price of 10 grams of gold has declined 14.5% since January.

Established in 2007 as a demutualised exchange, PMEX’s trade volumes have soared in the couple of years. However, institutional participation in the commodities trading remains minimal, says Khan.

[Source]