Gold gains further in local market as rupee declines to record low

Gold prices in Pakistan increased further on Tuesday, in line with rupee’s depreciation to a record low against the US dollar and gain in international prices.

On Tuesday, the price of 24-carat gold settled at Rs234,500 per tola, with an increase of Rs4,600, according to the rates shared by the All Pakistan Gems and Jewellers Sarafa Association.

Similarly, the price of 10-gram gold also rose by Rs3944 to Rs201,046.

The gold prices in Pakistan closely follow trajectory of the US dollar as the country remains a net importer of the precious metal.

The Pakistani rupee fell to a new record low against the US dollar, depreciating 0.63% in the inter-bank market on Tuesday. At close, it settled at 299.01, a decrease of Rs1.88, as per the State Bank of Pakistan.

Speaking to Business Recorder, Abdullah Abdul Razzak Chand, Vice President Society Jewellers Welfare Association, said rupee’s fall has caused a major increase in gold prices.

“Investors are taking refuge in the safe-haven metal on mounting concerns that the country’s economic conditions will deteriorate further,” he said.

In just a week, gold prices in Pakistan have risen by Rs12,700 per tola.

The price of the precious metal hit a record high of Rs240,000 per tola on May 10, 2023, amid political chaos in the country and decrease in the value of the local currency.

“[However,] jewellery sales have remained sluggish on high gold prices and inflation,” Chand added.

In the international market, the price of the precious metal increased by $10 to $1,901 per ounce on Tuesday.

Meanwhile, silver rates remained the same at Rs2,800 per tola.