Sunday March 03, 2024

Gold hits new high of Rs170,900 per tola in Pakistan on safe-haven buying

Silver prices also surge by Rs20 per tola to settle at an all-time high of Rs1,990

December 14, 2022
An image of gold necklace showcased in a jewellery shop. — AFP/File
An image of gold necklace showcased in a jewellery shop. — AFP/File

Amid constant depreciation of rupee against the US dollar, gold and silver continued to shined in Pakistan, rising to their all-time high levels on Wednesday.

Gold prices registered a meagre gain of Rs100 per tola and Rs86 per 10 grams to settle a historic high of Rs170,900 and Rs146,519, data released by All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed.

Silver prices also surged by Rs20 per tola and Rs17.15 per 10 grams to settle at an all-time high of Rs1,990 and Rs1,706.10.

Cumulatively, the price of gold rose by Rs7,850 per tola in the last seven sessions.

The association mentioned that although gold hit an all-time high in Pakistan, its price still stood below cost. Gold is cheaper by Rs2,000 per tola compared to its price in Dubai.

The local prices are based on rupee-dollar parity and international rates. According to market practice, local prices of gold usually go down on the rupee's appreciation against the US dollar and rising prices of commodities in the international market.

Speaking to earlier during the week, AA Gold Commodities Director Adnan Agar said the shortage of dollars was the major reason behind the constant increase in gold prices in the local market.

“Investors want to invest in the dollar because of the rising difference between the open market and the interbank market rate, which is around Rs20-30; however, despite the significant difference dollar isn't available and people are concerned about the financial situation in Pakistan and chances of default,” he explained the reason behind sudden shift in investors focus.

He added that because of the speculations that the dollar can reach 350-400 against the rupee; investors were trying to invest in the precious commodity.

“However, due to its [dollar] shortage they have shifted their focus toward gold as the price of the yellow metal is also rising in the international market,” Agar maintained.

In the international market, gold price fell registered a decline of $9 per ounce settling at $1,817. The price held above the $1,800 per ounce pivot as signs of cooling US inflation lifted expectations the Federal Reserve will adopt a less aggressive policy stance later in the day.