From Zeeshan Mirza
KARACHI: Following a historic decline of the Pakistani rupee against the US dollar, the per tola gold price in Pakistan surged by a whopping 4.77% as investors’ attention once again diverted towards the precious commodity considered as an inflation hedge.
According to All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) surged by Rs9,400 per tola and Rs8,058 per 10 grams to settle at Rs206,500 and Rs177,040, respectively.
The massive increase in the price of gold came on after the rupee plunged by nearly Rs19, or 6.66%, against the US dollar to close at 285.09 against the dollar in the interbank market.
The price of gold is Rs3,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.
It should be noted that Pakistan meets almost all its gold demand through imports, and traders follow its international price in setting rates in the country.
Jewellers import the metal against the US dollar and UAE dirham before converting its price into rupees.
Cumulatively, the precious commodity gained Rs12,400 per tola in the last three sessions reversing the prevailing trend recorded last week — when gold lost Rs1,900 per tola.
The precious commodity scaled to an all-time high of 210,500 per tola on January 30, 2023; however, the gold price started receding after the rupee recovered on hopes of revival of the $6.5 billion International Monetary Fund (IMF) bailout programme.
Meanwhile, silver prices in the domestic market jumped by Rs120 per tola and Rs102.88 Rs2,200 per tola and Rs1,886.14 per 10 grams, respectively.
Gold prices broke a winning run on Thursday, weighed down by a firmer dollar and bullion’s outlook remains clouded by prospects of further interest rate hikes from the US Federal Reserve. The per-ounce price settled at $1,837 after an increase of $27.
While gold is considered a hedge against inflation, recent central bank rate hikes to bring down price pressures have weighed on the appetite for the metal since it yields no interest.
