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business
Tuesday Jan 07 2020
By
Web Desk

Gold prices hit all-time high in Pakistan amid Gulf tensions

By
Web Desk
In the local market gold moved up Rs2,600 to Rs93,400/tola from Rs90,800/tola. Photo: Reuters

KARACHI: Gold prices hit an all-time high of Rs93,400/tola on Monday in Pakistan following tensions between United States and Iran, reported The News.

Tehran and Washington are at loggerheads following the killing of Iranian general Qassem Soleimani last week in Baghdad disrupting various investment markets.

Read more: Trump warns Iran of 'major retaliation', threatens sanctions on Iraq

In the local market, gold moved up Rs2,600 or 2.86 per cent to Rs93,400/tola from Rs90,800/tola, according to the publication.

President All Sindh Saraf Jewellers Association Haroon Chand said the Iran-US tension was the major cause behind the increase in prices of gold in the international market, while other reasons also contributed.

Local jewellers claimed the price of 10-gram gold also moved up Rs2,230 to Rs80,075. 

In the international market, the prices of the yellow metal increased $26 to $1,578 per ounce, the highest in the last five months.

Read also: Gold price reach record high of Rs90,800

“Whenever there is uncertainty and a war-like situation around the world, people invest in gold, which is considered a safe haven,” Chand said. He said there were other reasons as well besides Iran-US tension.

“The US is not increasing interest rate, nor are there any new jobs being created, so the dollar is also weakening and people are moving towards gold as a mode of investment,” he added.

Chand added the performance of the real estate market in the US also remained below than expectations in 2019, which was also moving investment towards gold. Given the situation, the trader said, gold was likely to take international market beyond $1,600 per ounce.

Muhammad Shafi Khan, a senior goldsmith, told The News that the sale of jewellery had also declined considerably in the last week. “Only investors are buying pure gold bars for investment purpose, while jewellery sale is down,” Khan said.

Khan said the international market was moving around $1,590 per ounce, while 95 per cent to 99 per cent local people had no means to buy gold. “Less than one per cent are coming to buy gold. They have no issue with the price and can afford gold, while 99 per cent of the people are going for artificial jewellery,” he said.

The goldsmith added the two to three days would be crucial. “If tensions increase and war starts gold can go to an all-time high,” he said. In the past, gold in the international market once peaked to $1,938 per ounce.

“If the situation calms down, it can go down $1,500 or below,” he said. 

Originally published in The News