KARACHI: The price of gold in Pakistan reached a new high of over Rs215,000 per tola following a drop in the value of the rupee against the US dollar in the interbank market.
The global markets’ upward trend also contributed to the surge in gold prices. The All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) reported that the price of 24-carat gold rose by Rs2,500 per tola and Rs2,142 per 10 grams, settling at Rs217,000 and Rs186,042, respectively. Gold is often considered a hedge against inflation and its value typically rises as the dollar’s purchasing power declines.
Pakistan experienced a high monthly inflation rate of 35.4% in March, causing more people to turn to gold as an investment. The precious metal increased by Rs8,700 per tola over three sessions, and investors have been turning towards it as tensions in the economy rise with the IMF reviewing external financing commitments from friendly countries before releasing bailout funds.
The Pakistani gold market is currently cheaper than the global market by Rs10,000 per tola. The price of silver in the local bullion market remained stable at Rs2,450 per tola and Rs2,100.48 per 10 grams, while the price of gold in the international market rose $41 per ounce, settling at $2,023.
As the IMF reviews Pakistan’s external financing commitments, the delay in the revival of the bailout program has negatively impacted the currency market. This, in turn, is bolstering the demand for gold as a safe-haven asset. Investors are shifting their focus towards the precious metal amid rising economic tensions in the country.
While the rising price of gold is good news for those who have invested in the commodity, it is a cause for concern for others. The high gold prices are making it difficult for people to buy jewelry and other items made of the metal. It is also impacting the country’s jewelry industry, which is struggling to compete in the global market due to high production costs. In addition, the high prices are likely to have a ripple effect on other sectors of the economy, further exacerbating the already challenging economic situation in Pakistan.
