KARACHI: Gold prices in Pakistan surged to a new record high on Saturday, tracking global gains as escalating geopolitical tensions boosted the metal's safe-haven appeal, traders said.
Gold rates in the local market rose by Rs1,500 per tola to reach an all-time high of Rs252,200, according to the All Sindh Saraf Jewellers Association.
The price of 10-gram gold climbed by Rs1,286 to Rs216,221.
Silver rates remained unchanged at Rs2,780 per tola, with 10-gram silver prices steady at Rs2,383.40.
In the international market, gold prices advanced $11 to $2,411 per ounce, with prices in the local market adjusted by a premium of $20.
The precious metal has seen a record surge this month due to tensions in the Middle East and central banks adding to their gold reserves.
Investors have flocked to gold as a haven asset amid concerns over a potential war in Europe and the Middle East.
Local jewellers reported a decrease in jewelry sales, with demand limited to raw gold or gold bars among investors.
However, some high-end buyers and overseas Pakistanis continued to purchase jewellery.
Analysts said the escalation and de-escalation situation in the Middle East has taken hold of the markets and if the situation does de-escalate, "then gold
will pull back or consolidate as safe-haven buying dries up".
However, longer term, higher uptrend in gold will continue as the US Federal Reserve might not be cutting rates as soon as the global market expects.
They added that gold, which has notched strong gains this year, will rise further on robust Chinese demand outlook and macro uncertainties while the central banks purchase are also placing a floor beneath the prices.
Analyst said the natural response is for investors to flee to gold when there are geopolitical tensions, which is happening now.
If the conflict further escalates, prices could go north of $2,500-$2,600 at the international market, and if there is a ceasefire, then they could fall to $2,200.
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