Gold prices hit all time high of Rs100,400/tola in Pakistan

KARACHI: The price of gold in Pakistan on Wednesday hit an all-time high of Rs100,400/tola as the world economy headed towards a recession due to the spread of the coronavirus pandemic.

According to rates issued by All Sindh Saraf Jewellers Association, prices moved up by Rs700/tola on Tuesday. Rate of 10-gram gold rose Rs600 to Rs86,076.

In the international market, bullion surged $31 to $1,721/ounce. The local market, however, remained closed due to the lockdown imposed in the country to contain the spread of the virus. 

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“Prices were increasing in the international market, while local market was just following the international rates,” said alHaj Haroon Chand, President Sindh Saraf Jewellers Association. “The local market is still under cost by Rs7,000/tola compared with the rates in Dubai gold market.”

Ahsan Mehanti, CEO Arif Habib Commodities, said that besides an increase in international prices of gold and the devaluation of the Pakistani rupee, the unavailability of gold was also a major reason behind the price surge. “Markets are closed, source countries are also locked down, so gold is unavailable and the price moved up,” he said.

Muhammad Shafi Khan, a senior goldsmith, said that the price of gold was continuously going up because of the impact of the coronavirus on the market. “In the longterm, prices will not sustain at this level once virus-related panic subsides,” Khan said. “Prices will come down in future," he added.

"In the local market, buying declined along with record rupee depreciation against the US dollar. Before the lockdown, only needy people were buying gold for marriages, but they too had to cut down the weightage of the jewellery," he observed. 

The goldsmith said the gold prices in the international market were chasing the all-time high of $1923 per ounce when prices in Pakistan had reached Rs64,000 per tola, but back then, the rupee was stronger. “Now rupee is weak, and impact is higher,” he said.

Khan said the coronavirus fear was so strong, it had made people believe that investing in gold was better than investing in currencies. “Investors are believing in gold only,” he said.

Originally published in The News