KARACHI: Gold prices surged by Rs4,600 per tola on Thursday, reaching an all-time high in the local market following a significant increase in the international market.
The All Sindh Saraf Jewellers Association reported that gold rates climbed to Rs254,000 per tola, setting a new record. Similarly, the price of 10-gram gold rose by Rs3,944, bringing it to Rs217,764.
In the international market, gold rates increased by $60, reaching $2,470 per ounce. Despite the steep rise in gold prices, silver rates remained unchanged at Rs2,900 per tola, with 10-gram silver prices holding steady at Rs2,486.28.
Local prices are adjusted by a premium of $20 compared to international rates. However, local jewellers indicated that, considering the weak purchasing power in the country, gold rates were lowered by Rs4,000 per tola relative to the international market.
Senior goldsmith Muhammad Shafi Khan attributed the price hike to ongoing geopolitical and economic issues worldwide. He predicted that prices might continue to rise. “Prices are higher in the local market because of the international market,” Khan said. “There is not much demand for physical gold in the local market. People are buying raw gold. Demand for jewellery is slow. Our workers have lost jobs because there is no work for jewellery.”
Khan further explained that the global economy is struggling, including significant challenges in the US. “Gold prices soar in these conditions. When gold prices are shooting up, it shows the economy is weak. When gold comes down, it shows the strength of the economy,” he noted. The current economic climate has driven people to buy gold for profit-taking, as the real estate and other property markets are sluggish. “Thus, people are looking at raw gold,” Khan said.
This surge in gold prices is largely due to the escalating geopolitical tensions and economic uncertainties, particularly in Europe and the Middle East. Investors are increasingly turning to gold as a safe-haven asset amid these volatile conditions.
Tensions in the Middle East have further exacerbated the uncertainty in international markets, pushing more investors towards gold, widely regarded as a secure investment during times of crisis.
Local jewellers have observed a significant decline in jewellery sales due to the rising gold prices. Instead, there is a growing demand for raw gold or gold bars, primarily from investors looking to hedge against economic uncertainty. However, affluent individuals and overseas Pakistanis continue to purchase jewellery despite the prevailing high prices.
Analysts suggest that the depreciation of major currencies against the US dollar has also contributed to the surge in gold prices. Investors view gold as a hedge against currency devaluation, further driving up demand for the precious metal.
The ongoing volatility in global markets is likely to sustain the upward trajectory of gold prices in the foreseeable future. As long as geopolitical tensions persist and economic uncertainty prevails, gold is expected to remain a preferred asset among investors seeking stability and security in their portfolios.
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