Gold continued its merry run on Wednesday, crossing Rs250,000 per tola mark for the first time in Pakistan as a record surge in the international rate in recent days amid fears of escalation in the Middle East maintained the yellow metal’s safe-haven appeal.
In the local market, gold price per tola increased by Rs2,200 on Wednesday to reach Rs251,900, according to the All Pakistan Gems and Jewellers Sarafa Association (APGJSA). This is its highest rate in Pakistan.
The price for 10 grams of gold is now at Rs215,964, up by Rs1,887, APGJSA said.
The international rate of gold was $2,387.5 per ounce at the time of reporting, a significant increase from roughly around $2,000 in February this year.
On Tuesday, gold price per tola had increased by Rs2,400 in Pakistan.
Adnan Agar, Head of Operations, Interactive Commodities Pvt Limited, stated, “The market is expecting some correction to take place provided there’s no escalation in the Middle East.”
He explained that since gold and other commodities do not yield dividends, profit-taking occurs whenever there is a possibility.
“I think a correction (profit-taking) can happen anytime now since gold is hovering at an all-time high after a rally of around $400 in the last two months.
“I believe buyers are reluctant to buy right now despite gold’s positive outlook, which is speculated to reach around $2,600-$2,700 by the end of this year,” he added.
“There’s a slight lull in the Iran-Israel confrontation, but it cannot be ruled out in the remainder of the year.”
Retreat from record high: gold price per tola decreases Rs1,100 in Pakistan
Gold and other precious metals are considered safe havens for investments during times of uncertainty such as natural calamities, wars, and crises.
Agar also noted that China’s central bank has been showing an appetite for buying gold for over a year. Additionally, inflation is expected to remain high in the US, and rate cuts may not be on the cards in the near future.
Akhtar Tesori, Chairman of the Pakistan Gems Jewellery Traders and Exporters Association (PGJTEA), told Business Recorder that the gold jewellery business had declined considerably due to the rising gold prices in the country.
“Due to high inflation and financial crisis that common people are going through in the country, more people are selling gold jewellery than buying. People are selling gold bangles that are normally kept within the family and passed on to the next generation.”
Tesori claimed that gold jewellery sales have decreased by 80% as compared to the last year.