Gold hit a record high of Rs214,500 per tola (11.66 grams) in Pakistan on Tuesday due to a downward trend in the rupee and an uptrend in the precious yellow metal in the world markets.
Data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of gold (24 carats) jumped by Rs5,000 per tola and Rs4,288 per 10 grams to settle at Rs214,500 and Rs183,900.
Cumulatively, the precious commodity gained Rs5,200 per tola during the two sessions (Monday-Tuesday).
Gold is often hailed as a hedge against inflation—increasing in value as the purchasing power of the dollar declines.
Pakistan’s monthly inflation blew past forecasts in March and soared to a nearly all-time high level — 35.4% — from a year earlier, with people feeling more pain from some of the fastest rising consumer prices amid straining budgets as cost of living continues to outstrip average incomes.
Investors’ attention shifted towards the precious commodity during the week as the economic tensions continue to rise amid the International Monetary Fund (IMF) reviewing external financing commitments from friendly countries before it releases bailout funds.
The delay in the revival of the programme negatively impacted the currency market which in turn is bolstering demand for gold.
Gold price moves in line with the rupee-dollar parity as the country meets almost all its gold demand through imports, and traders follow its international price in setting rates in the country.
Jewellers import the metal against the US dollar and UAE dirham before converting its price into rupees.
Moreover, a hike in seasonal demand added fuel to the rising prices in the local bullion market.
The association also mentioned that the price of gold is Rs7,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.
Meanwhile, silver prices in the domestic market jumped to an all-time high of Rs2,450 per tola and Rs2,100.48 per 10 grams after an increase Rs100 per tola and Rs85.74 per 10 grams, respectively.
In the international market, gold price gained $12 per ounce to settle at $1,982.
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