Gold rate in Pakistan today: Bullion maintains record-breaking spree, hits all-time high

Investors are taking efuge in the precious metal — considered a safe haven — due to escalation in geopolitical tensions
An undated image of jewellery dispkayed at a gold shop. — Freepik
An undated image of jewellery dispkayed at a gold shop. — Freepik

Gold price in Pakistan reached a new all-time high at Rs252,200 per tola (11.66 grams) on Saturday, marking a historic moment in line with the global record-breaking trend.

According to the data released by All Pakistan Sarafa Gems and Jewellers Association, the price of gold rose by Rs1,500 per tola and Rs1,286 per 10 grams to settle at Rs252,200 and Rs216,221, respectively.

Gold price has been rising in the local and international market as investors are taking refuge in the precious metal — considered a safe haven — due to escalation in geopolitical tensions.

Traders were aggressively shifting investment to gold in the aftermath of two major events — the escalation in geopolitical tensions and weakening of global currencies, particularly the US dollar, which sparks inflationary pressure.

In the international market, per ounce gold price gained $11 to settle at $2.411 as fears of further tit-for-tat retaliation between Iran and Israel triggered safe-haven demand.

"The escalation and de-escalation situation in the Middle East has taken hold of the markets. If the situation does de-escalate, then gold will pull back or consolidate as safe-haven buying dries up," said David Meger, director of metals trading at High Ridge Futures.

"However, longer term, higher uptrend in gold will continue as the Federal Reserve might not be cutting rates as soon as the market expects."

Fed officials have coalesced around the idea that there is no urgency to cut interest rates. The market currently sees a about 67% chance of a rate cut in September. Elevated interest rates reduce the appeal of holding non-yielding gold.

Meanwhile, silver price in the local market remained unchanged at Rs2,780 per tola and Rs2,383.40 per 10 grams.

Gold price in Pakistan is announced by the association, which determines gold prices in Pakistan for local markets six days a week from Monday to Saturday.

Pakistan is a small market for gold at the global level. It meets the commodity’s demand through imports as it does not produce the precious metal locally.

Accordingly, the gold rate in Pakistan is determined by keeping in view its prices in world markets, rupee-dollar exchange rate, and demand and supply in domestic markets. The latest price for local markets was determined to keep in view the prices at which trade took place among buyers and sellers.

Gold price in Pakistan has been volatile in Pakistan recently amid continued political and economic uncertainty and high inflation. People prefer to buy this precious commodity in such times as a safe investment and a hedge.

— Additional input from Reuters