Gold dazzles as rupee rout continues

Gold price in Pakistan continued to gain following the international precious metal markets that are rising in reaction to a hawkish US Federal Reserve, while the rupee’s plunging to a historic low also drove investors towards gold — as saving options already remain limited.

The price of gold (24 carats) increased by Rs2,200 per tola and Rs1,887 per 10 grams to settle at Rs207,200 and Rs177,641, respectively, data released by the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed.

The precious commodity has been registering gains for two consecutive sessions amid falling forex reserves and a weak rupee — which will make it costlier as Pakistan meets its gold demand through imports.

Investors were, however, purchasing only gold bars, not jewellery, which had not only reduced goldsmiths' profit margins but the labour force was also at the stake of losing jobs, as jewellery makers were moving towards other professions in absence of work.

Meanwhile, silver prices in the domestic market increased by Rs50 per tola and Rs42.88 per 10 grams to settle at Rs2,300 and Rs1,971.88, respectively.

In the international market, the precious metal surged to a nine-month high on a subdued dollar, as investors held onto the view that the US Federal Reserve would soon end its rate hiking cycle after it announced a 25-basis-point increase.

Spot gold was up $31 at $1,955 per ounce, having hit its highest since April 2022 earlier in the session.

Demand for the precious metal, traditionally a haven investment in times of economic and geopolitical turmoil, rocketed almost a fifth to 4,740.7 tonnes in 2022 from the prior year, the World Gold Council (WGC) said.

— Additional input from AFP