Gold hit new highs in Pakistan on Friday as the rupee fell further against the US dollar, with a lack of liquidity fueling safe-haven buying.
According to the data released by All Pakistan Sarafa Gems and Jewelers Association (APSGJA), the price of the precious metal recorded an increase like the previous day, which was Rs 500 per tola and Rs 428 per 10 grams with an increase of Rs 170,900 and Rs. 147,376 reached an all-time high of Rs. ) Shown.
Meanwhile, silver prices fell by Rs 30 per tola and by Rs 25.72 per 10 grams. The prices closed at Rs 1,960 and Rs 1,680.38 respectively.
Although the price of gold in Pakistan is at an all-time high, it is still priced below cost, the association said. Gold in Dubai is cheaper than its price by Rs 3000 per tola.
As per market practice, local gold prices are generally driven by depreciation of the rupee against the US dollar and fall in commodity prices in the international market.
Depreciation of the rupee against the US dollar led to a rally in the gold market, which has rallied by Rs 8,850 per tola over the past nine sessions.
The price of gold in the international market reached 1782 dollars after an increase of 4 dollars per ounce.
Commodity experts attribute the main reason for the continuous rise in gold prices in the local market to the lack of US currency.
“Investors want to invest in dollars because of the widening gap between the open market and interbank market rates, which is around Rs 20-30. Concerned about the situation and the possibility of default,” said Adnan Agar, director at AA Commodities, explaining the sudden shift in investor focus.
He added that due to speculations that the dollar could reach 350-400 against the rupee. Investors were trying to invest in a valuable commodity.
“However, due to its [dollar] scarcity, they have shifted their focus to gold as the price of the yellow metal is also rising in the international market,” Agar added.
