Gold prices hit record high of Rs96,300/tola as global rates soar

KARACHI: Gold prices jumped over two percent on Monday to their all time high of Rs96,300/tola, in line with the global trend, as reports of coronavirus cases in neighboring countries deepened worries about a hit to already fragile economy, dealers said.

Gold moved up by Rs2,000/tola to record Rs96,300/tola, prices quoted at Sindh Saraf Jewellers Association (SSJA). Rates of 10-gram gold also moved up by Rs1,715 to reach Rs82,562.

Haroon Chand, president SSJA said the local market is following the international rates as global trade witnessed panic on reports of coronavirus cases in Iran, Bahrain and Qatar. “Local market is still under cost by Rs1,800/tola compared with the rates in Dubai gold market, as buying power is very low in the local market.”

In the international market, prices surged $40 to $1,684/ounce. Chand said the market went in panic mode after the news from Iran started flowing about the number of cases increasing. “There is a lot of movement between Iran and Pakistan,” he said, while explaining the reason for the panic.

“If the panic subsides and the virus situation gets under control, prices of gold will decline too. Otherwise, international rates will move to $1,700/ounce within a few days,” Chand added.

Ahsan Mehanti, CEO Arif Habib Commodities, said gold prices were increasing as investors moved towards “safe haven assets; they were not going behind currency assets”. Due to the impact of coronavirus, international oil prices were also affected. He said that global markets were declining, which would further move gold up. Gold prices could increase to $2,000/ounce, which means an increase of around 20 to 25 percent in the gold prices. “Now, global growth is weak. When global growth is weak, people go for gold buying. Thus, its price will keep moving up,” he added.

Muhammad Shafi Khan, a senior goldsmith said gold was continuously going on the upside because of the coronavirus impact. “In the long-term, prices will not sustain at this level once the virus-related panic subsided,” he said. “Prices will come down in future.”

In the local market, buying has declined over the last year since record depreciation of rupee against dollar, he said. “Buying never returned to the same level.”

Only those who need to buy gold for marriages were buying the commodity, and to do that they were cutting down on the weight of the jewellery, he explained. Khan said those people who purchased gold as a pride, have stopped buying at all. “Very few people were buying gold biscuits just for investment.”