Gold prices in Pakistan approach record high as international rates soar to all-time peak

KARACHI: Gold prices in Pakistan rose by Rs 1,800 per tola on Wednesday, heading back towards an all-time high that they had hit in June of the previous year, as the precious metal took its cue from the rising global market that touched a new peak.

The All Sindh Saraf Jewellers Association stated that gold rates reached Rs238,900 per tola. The highest rate in the country was recorded in June 2023 at Rs240,000 per tola. Similarly, the price of 10-gram gold rose by Rs1,543 to Rs204,818.

Silver rates increased by Rs10 to Rs2,610 per tola. Similarly, 10-gram silver rates also rose by Rs 8.57 to Rs2,237.65.

Gold rates increased by $18 to $2,290 per ounce, which is the all-time high rate in the international market.

Prices in the local market are adjusted by a premium of $20 against rates in the international market.

Senior goldsmith Muhammad Shafi Khan said gold prices are hourving at a record high in the international market. “Because of the international rates, prices are increasing in the local market as well. However, the local market is still trading below the international rates.”

Khan said jewellery is not in high demand because purchasing power has decreased in the country. "Overseas Pakistanis are purchasing, besides those who are rich and have a lot of wealth; they buy from here and abroad as well, but their number is limited."

He said mostly raw gold or gold bars are on sale. "Those who have cash flow are buying gold, as the property business is down and people are investing in this precious metal".The international market has various reasons for an increase in the gold rates, including the Ukraine-Russia war and the attack on the Iranian embassy in Damascus.

"Israel’s continuous attacks on Palestine are also fuelling it up. These are the major reasons behind the gold price increase," Khan said. June futures in the international market are trading at $2,300 per ounce, while the current rate is trading around $2,280 to $2,290.Khan said that the market would further increase shortly, as the world is in geopolitical conflict.

"Besides that, inventions under Artificial Intelligence can also be seen as a factor behind the gold price increase," he said. "In the new inventions under AI, these metals, including gold, platinum, and other metals' use, is increasing. After gold, silver prices are expected to increase in the future as well. There is a lot of demand for gold. Once demand increases, prices also increase."