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Thursday June 20, 2024

Gold shines brighter than ever as it sets fresh record

Price of gold (24 carats) rises over Rs225,000 for the first time

By Business Desk
May 04, 2023
A shopkeeper sets gold jewellery at his store in Rawalpindi in this undated file photo. — AFP
A shopkeeper sets gold jewellery at his store in Rawalpindi in this undated file photo. — AFP

The price of gold soared to another record high Thursday on the back of an increase in the international rate as well as the ongoing economic crisis.

The rate of gold (24 carats) jumped by Rs2,600 per tola and Rs2,229 per 10 grams to reach Rs225,300 and Rs193,158, respectively, according to data provided by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA).

The price of gold in the international market rose by $29 to settle at $2,044 per ounce.

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 the yellow metal to protect themselves against inflation and currency depreciation.

The rupee had fallen to an all-time low of Rs288.43 against the US dollar in the interbank market on April 11. While it has recovered since then, the US dollar continues to trade above Rs280.

On Thursday, the rupee gained Re0.06 to close at Rs283.82 per dollar in the interbank market.

Meanwhile, 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.

The association also mentioned that the price of gold is Rs2,500 per tola "undercost" in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.

Data shared by the association showed that silver also rose to a new high in the country. The rate of silver increased by Rs120 per tola and Rs102.88 per 10 grams to settle at Rs2,870 and Rs2,460.56, respectively.