Gold jumps to new peak in Pakistan as rupee loses traction
- Gold prices post gains of Rs500 per tola and Rs428 per 10 grams
- Gold is cheaper compared to its price in Dubai by Rs3,000 per tola.
- Silver price loses ground after losing Rs30 per tola.
Gold jumped to new highs in Pakistan on Friday as the rupee continued to lose ground against the US dollar, sparked by a liquidity crisis that prompted a spike in safe-haven buying.
The price of precious metals posted the same gains as yesterday, rising by 500 rupees per tola and 428 rupees per 10 grams to hit historic highs of 170,900 rupees and 147,376 rupees, according to data from All Pakistan Sarafa Gems and Jewelers Association (APSGJA). published ) showed.
Meanwhile, silver prices lost ground after losing 30 rupees per tola and 25.72 rupees per 10 grams. Prices closed at Rs1,960 and Rs1,680.38.
The association mentioned that even though gold hit an all-time high in Pakistan, its price was still below cost. Gold is cheaper compared to its price in Dubai by Rs3,000 per tola.
As per market practice, local gold prices usually increase due to the devaluation of the rupee against the US dollar and falling commodity prices in the international market.
The devaluation of the rupee against the US dollar sparked a rally in the gold market, resulting in a rise of Rs8,850 per tola over the past nine sessions.
In the international market, gold prices settled at $1,782 after rising $4 an ounce.
Commodity experts cite the shortage of the US currency as the main reason behind the steady rise in gold prices in the local market.
“Investors are looking to invest in the dollar because of the widening spread between the open market and the interbank market rate, which is around 20-30 rupees; However, despite the significant difference, the dollar is not available and people are concerned about the financial situation in Pakistan and the likelihood of default,” said Adnan Agar, director of AA Commodities, explaining the reason for the sudden shift in investor focus.
He added that due to speculation that the dollar could reach 350-400 against the rupee; Investors tried to invest in the precious commodity.
“But because of his [dollar] Failing that, they have shifted their focus to gold as the yellow metal’s price is also rising in the international market,” Agar added.