Gold rate surpasses previous records

With Pakistan's overall economic prospects remaining gloomy and inflation hitting new records, gold prices Wednesday jumped to another all-time high.

The rate of gold (24 carats) jumped by Rs1,700 per tola and Rs1,457 per 10 grams to reach Rs222,700 and Rs190,929, respectively, according to data provided by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA).

The gold rate has been on a steady uptrend in Pakistan, as economic fundamentals weakened, the rupee depreciated and inflation soared to record highs. During such times, people prefer to buy yellow metal to protect themselves against inflation and currency depreciation.

Inflation in April clocked in at 36.4% year-on-year — a record high — which means Pakistan has the fastest rising prices in Asia, beating even Sri Lanka where inflation was measured at 35.3% in the previous month.

Another reason for the increased gold demand is the delay in an agreement with the International Monetary Fund (IMF) for a desperately needed economic bailout, without which the country risks default.

The delay in the revival of the IMF programme negatively impacts the currency market which, in turn, bolsters the demand for gold.

Meanwhile, the price of gold jumped $25 at $2,015 per ounce in the international market.

Data shared by the association showed that the price of silver rose by Rs20 per tola and Rs17.15 per 10 grams to settle at Rs2,750 and Rs2,357.68, respectively — which the APSGJA said were also record highs.