KARACHI: The price of gold in Pakistan on Tuesday reached a historic high of Rs214,500 per tola (11.66 grams) due to the fall of the Pakistani rupee to a record low against US dollar in interbank market.
The surge was attributed to the falling rupee and a rise in the global commodity markets. According to the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the 24-carat gold price rose by Rs5,000 to Rs214,500.
Inflation in Pakistan reached an almost all-time high of 35.4% in March, driving investors to view gold as a hedge against inflation. The delay in the International Monetary Fund (IMF) bailout programme also impacted the currency market and increased the demand for gold. As Pakistan relies heavily on gold imports, traders follow the international price of gold to set local rates.
Silver prices also increased to an all-time high of Rs2,450 per tola and Rs2,100.48 per 10 grams, and the international gold price settled at $1,982 per ounce. The APSGJA reported that gold in Pakistan was Rs7,000 per tola cheaper than the global Dubai market.
The surge in gold prices in Pakistan is not an isolated event, but rather part of a larger trend of rising gold prices globally. In fact, the price of gold has been steadily increasing since the start of the COVID-19 pandemic in early 2020. One reason for this is that investors often turn to gold during times of economic uncertainty as a safe haven investment.
Another factor driving up the price of gold is inflation. As inflation rises, the purchasing power of paper currency declines, leading investors to seek out alternative stores of value like gold. Inflation has been a major concern in Pakistan, with the country experiencing some of the highest inflation rates in the world in recent months.
Despite the high cost of gold in Pakistan, the precious metal remains a popular investment among Pakistanis, particularly during times of economic turbulence. Gold is often seen as a stable and reliable asset that can hold its value even during periods of market volatility.
However, the rise in gold prices also has some negative implications for the economy. For one, it can lead to an increase in smuggling and illegal gold trading, which can hurt the government’s revenue collection efforts. Additionally, high gold prices can also make it more difficult for small businesses and consumers to afford gold jewelry, which could hurt the country’s gold industry.
