Business Desk
Apr 17, 2024
Gold price in Pakistan once again came into the limelight on Wednesday as it soared Rs2,200 per tola (11.66 grams) to an all-time high of Rs251,900 after global investors took refuge in the yellow metal as geopolitical tensions in the wake of Middle East crisis.
The price of gold surged by Rs2,200 per tola and Rs1,887 per 10 grams to settle at Rs251,900 and Rs215,964, respectively, the data released by All Pakistan Sarafa Gems and Jewellers Association showed.
The constant increase in the gold price in Pakistan can be attributed to a significant increase in the international market, where rates have also reached an all-time high.
Followng an increase of $21 per ounce, gold price in the international market settled at an all-time high of $2,412.
Read more: Why is gold shinning? What's driving prices to record levels?
Investors increasingly turn to gold as a safe-haven asset amidst escalating geopolitical tensions in Europe and the Middle East. With new tension emerging between Iran and Israel, uncertainty in the international markets has increased, which moved investors towards gold, which is considered a safe haven.
It should be noted that the prices in the local market are adjusted with a premium of $20 against rates in the international market.
However, despite wedding season local jewellers reported a decline in jewellery sales in the country due to the rise in gold prices. Instead, there is a growing demand for raw gold or gold bars, primarily from investors seeking to hedge against economic uncertainty. However, some affluent individuals and overseas Pakistanis continue to purchase jewellery.
Moreover, the weakening of major currencies against the US dollar has also contributed to the surge in gold prices. Investors view gold as a hedge against currency depreciation, further driving up demand for the precious metal.
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.
Meanwhile, silver price in the international market rose by Rs130 per tola and Rs111.46 per 10 grams in the local market settling at Rs2,780 per tola and Rs2,383.40 per 10 grams.
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.
