Gold rushes to record high on safe haven buying

KARACHI: Gold rates on Tuesday surged Rs4,200 to an all-time high of Rs132,000/tola, touched on August 6 last year, which jewelers said was an upshot of rupee free fall versus dollar.

Prices in the international market were under control but the local market witnessed an unusual increase owing to the depreciation of local currency, which resulted in higher demand than supply in the local market.

According to numbers released by All Sindh Saraf Jewelers Association, the rate of 10-gram gold, increased Rs3,600 to Rs113,168.

Gold prices in the local market have moved up by Rs18,500 per tola in the last 26 days, since October 1, 2021.

In the international market, gold rates increased only $2 to $1,804/ounce.

Silver rates rose Rs50 to Rs1,520/tola. The price of 10-gram silver also jumped Rs42.87 to Rs1,303.15.

Local jewelers said rates in the local market, contrary to the past trend, remained higher by Rs4,000 per tola compared with Dubai market.

Muhammad Shafi Khan, a senior goldsmith, told The News the major reason behind this surge was the record depreciation of the rupee to Rs175/dollar.

“People are afraid and investing in the gold. Demand has surpassed the supply in the local market,” Khan said.

Looking at the further expected devaluation of rupee, there were chances of a further increase in the local gold prices.

“Last year, international prices were higher but our currency was a bit stronger than today,” he said.

Khan said in the international market, prices were stable and not at the peak level. “International market has touched this price several times. The issue of the rate is in the local market, which was mainly due to a demand higher than supply,” he said.

Haji Haroon Rasheed Chand, Chairmn All Sindh Sarafa Association, believes local gold prices increased after the international gold rose by $2 dollar/ounce on Tuesday.

Chand said that demand for gold in the local market was mainly coming from the investors as they were considering gold along with the dollar as “safe avenues” for the investment.

“In view of continuous deprecation of local currency against dollar, gold prices are set to rise further as dollar as per market speculations would touch Rs180 mark in the coming days,” Chand said.