Monday May 20, 2024

Gold rate in Pakistan races to historic high

Price of gold (24 carats) increases by Rs600 per tola and Rs514 per 10 grams to settle at Rs218,300 and Rs187,157, respectively

By Business Desk
April 11, 2023
A representational image of gold bangles. — AFP/File
A representational image of gold bangles. — AFP/File

Gold price jumped to a historic high in Pakistan after the rupee's record depreciation against the dollar stampeded investors towards the safe-haven metal.

The price of gold (24 carats) increased by Rs600 per tola and Rs514 per 10 grams to settle at Rs218,300 and Rs187,157, respectively, data from the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA).

The yellow metal's jump was in line with the rupee movement — which plunged 1.34 or 0.46% to 288.43 against the US dollar in the interbank market — and an increase in the weekly inflation.

Weekly inflation jumped up 0.92% week-on-week and 44.49% year-on-year during the seven-day period that ended April 6, as prices of sugar and chicken surged on account of Ramadan and likely hoarding.

Gold is often hailed as a hedge against inflation, increasing in value as the purchasing power of the dollar declines and due to the seasonal demand in the holy month of Ramadan.

Investors’ attention shifted towards the precious commodity during the week as the economic tensions continue to rise amid the International Monetary Fund (IMF) reviewing external financing commitments from friendly countries before it releases bailout funds.

The delay in the revival of the programme negatively impacted the currency market which in turn is bolstering demand for gold.

The association also mentioned that the price of gold is Rs5,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.

Meanwhile, silver prices in the domestic market also jumped to historic highs after an increase of Rs40 per tola and Rs34.30 per 10 grams to settle at Rs2,520 and Rs2,160.5, respectively.

In the international market, gold price dropped $1 per ounce to settle at $2,001.