Local gold prices hit new peak on rising geopolitical concerns

Local jewellers reported a decline in jewellery sales in the country due to the rise in gold prices

By Our Correspondent
April 17, 2024
A representational image of gold bangles. — AFP/File

KARACHI: Gold prices in the local market surged by Rs2,400 per tola on Tuesday, reaching an all-time high, mirroring a similar trend in the international market.


According to All Sindh Saraf Jewellers Association data, gold rates soared to an unprecedented Rs249,700 per tola. Similarly, the price of 10-gram gold witnessed a substantial increase of Rs2,057, reaching Rs214,077.

In the international market, gold rates surged by $20 to $2,391 per ounce, marking a new peak in the global market.Despite these remarkable increases in gold prices, silver rates remained unchanged at Rs2,650 per tola. Similarly, 10-gram silver rates also remained steady at Rs2,271.94.

Notably, prices in the local market are adjusted with a premium of $20 against rates in the international market.The surge in local gold prices can be attributed to a significant increase in the international market, where rates have also reached an all-time high. Investors increasingly turn to gold as a safe-haven asset amidst escalating geopolitical tensions in Europe and the Middle East. With new tension emerging between Iran and Israel, uncertainty in the international markets has increased, which moved investors towards gold, which is considered a safe haven.

Local jewellers reported a decline in jewellery sales in the country due to the rise in gold prices. Instead, there is a growing demand for raw gold or gold bars, primarily from investors seeking to hedge against economic uncertainty. However, some affluent individuals and overseas Pakistanis continue to purchase jewellery.

The surge in gold prices reflects the broader economic uncertainty prevailing globally. Heightened geopolitical tensions, particularly in regions like Europe and the Middle East, have fueled investor concerns, prompting them to seek refuge in assets like gold, which are perceived as safe havens during times of crisis, said one analyst.

Moreover, the weakening of major currencies against the US dollar has also contributed to the surge in gold prices. Investors view gold as a hedge against currency depreciation, further driving up demand for the precious metal.

Analysts suggest that the ongoing volatility in global markets is likely to sustain the upward trajectory of gold prices in the foreseeable future. As long as geopolitical tensions persist and economic uncertainty prevails, gold is expected to remain a favoured asset among investors seeking stability and security in their portfolios.