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Tuesday March 05, 2024

Pakistan gold near one-week peak on safe-haven buying

Rising gold prices have raised concerns about whether soaring price is sustainable or constitutes an unsustainable bubble

December 26, 2022
People buy jewellery at a jewellery store in Amritsar on October 22, 2022. — AFP/File
People buy jewellery at a jewellery store in Amritsar on October 22, 2022. — AFP/File

Gold rose to a hover near a one-week high on Monday as concerns over the depreciating rupee lifted bullion's appeal as a safe haven and an inflation hedge.

The prices of gold rose by Rs700 per tola and Rs600 per 10 grams to settle at Rs178,200 and Rs152,778, data released by All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed.

Rising gold prices have raised concerns about whether the soaring price is sustainable or constitutes an unsustainable bubble. The precious commodity has gained Rs17,000 or 10.5% per tola since December 1.

Cumulatively, the price of the yellow metal gained Rs4,800, or 2.77%, per tola during the week ended December 24. The per tola gold price touched an all-time high of Rs180,650 on December 22.

In the international market, gold price was unchanged at $1,798 as most markets remained closed for the Christmas holiday.

It should be noted that the APSGJA notifies the gold rates to the market every day after determining the price by keeping in view its rates in world markets, the rupee-dollar exchange rate, and demand and supply in domestic markets.

Pakistan, however, has seen days recently when the bullion recorded a reduction in its price in international markets, but local pricing bodies kept ballooning the commodity price in the country amid high demand and low supply scenarios for the metal.

Analysts believe that the unavailability of the dollar in Pakistan and the widening difference between interbank and open market exchange rates triggered the recent price hike; however, grey markets of the precious commodity have also added fuel to the speculations.

Meanwhile, silver prices remained unchanged at Rs2,020 per tola and Rs1,731.82 per 10 grams, respectively.