KARACHI: Gold prices in the local market hit an all-time high of Rs93,400/tola following tension in the Persian Gulf between Iran and the US, dealers said on Monday.
The two countries are at loggerheads following the assassination of Iranian military general Qassem Soleimani by the US last week in Baghdad and it has disrupted various investment markets.
In the local market, gold moved up Rs2,600 or 2.86 percent to Rs93,400 per tola from Rs90,800 per tola. Haroon Chand, President All Sindh Saraf Jewellers Association, said Iran-US tension was the major cause behind the increase in the prices of the precious metal in the international market, while other reasons also contributed.
Price of 10 gram gold also moved up Rs2,230 to Rs80,075. In the domestic market, gold still traded at Rs1,000 per tola below the rates in Dubai bullion market, local jewellers claimed.
In the international market, the prices of the yellow metal increased $26 to $1,578 per ounce, the highest in last five months.
“Whenever there is uncertainty and war-like situation around the world, people invest in gold, which is considered safe haven,” Chand said. He said there were other reasons as well besides Iran-US tension.
“The US is not increasing interest rate, nor are there any new jobs being created, so dollar is also weakening and people are moving towards gold as a mode of investment,” the jewelers association leader said.
Performance of real estate market in the US also remained below than expectations in 2019, which was also moving investment towards gold. Chand said given the situation the gold was likely to take international market beyond $1,600 per ounce.
Muhammad Shafi Khan, a senior goldsmith, said sale of jewellery had declined considerably in the last one week. “Only investors were buying pure gold bars for investment purpose, while jewellery sale is down,” Khan said.
He said international market was moving around $1,590 per ounce, while 95 percent to 99 percent local people had no means to buy gold. “Less than one percent people are coming to buy gold. They have no issue with the price and can afford gold, while 99 percent people are going for artificial jewellery,” he said.
Khan said the next two to three days would be crucial. “If tensions increase and war starts gold can go to all-time high,” he said. In the past, the gold in the international market once peaked to $1,938 per ounce.
“If the situation calms down, it can go down $1,500 or below,” he said. In 2019, per ounce gold price increased $238 to $1,522 in the international market from $1,284. At the local market, per tola prices moved up Rs20,600 to Rs88,400 from Rs67,800 and 10 gram jumped Rs17,660 to Rs75,790 from Rs58,130.