Price of gold surges to all-time high at Rs128,700/tola

KARACHI: Gold prices reached an all-time high of Rs128,700/tola Wednesday after gaining more than 46% in 2020 from the meagre 30% in 2019, according to dealers.

The dealers said that gold prices surged following the global trend as the rates in the international market rose by $66 to an all-time high level of $2,041 per ounce.

The prices peak at the back of a weaker dollar, falling US Treasury yields and the measures to revive economies around the world due to the  coronavirus pandemic.

The All Sindh Saraf Jewellers Association (ASSJA) said gold rates in the local market have risen to Rs128,700 per tola, while 10 gram gold price increased by Rs4,116, reaching to Rs110,340/10 gram.

President ASSJA Haroon Chand said gold prices were apparently not in control. “There is a forecast of $2,100 and $2,200 per ounce for the month in the international market.”

Meanwhile, silver rates increased by Rs130 to reach Rs1,630/tola. Silver rates of 10 gram have also risen by Rs111.46 to reach Rs1,397.46/10 gram.

Local jewellers said that in the local market, prices remained Rs1,000 per tola, below the rates in the Dubai gold market.

CEO Arif Habib Commodities, Ahsan Mehanti, said gold prices were increasing with the weakening dollar and geopolitical uncertainty.

“Investors are going towards safe haven assets,” Mehanti said.

A veteran goldsmith, Muhammad Shafi Khan, said there were talks that the metal would reach the price of $3,000/ounce, as it was on an upward trajectory.

“Jewellery trade is slow, and people are instead buying gold bars in various weightages, starting from a gram,” Khan said.

“We are selling one gram bars, 2.5 gram bars, 5 gram bars, 10 gram bars and above.”

It has been noted that there is very little trade of jewellery. The sharp gold price hike has kept jewellers and retail buyers from making purchases.

“Market is slow but gold is on a high run,” Khan added.

Gold rates in 2020 have risen by Rs40,550 per tola to Rs128,700 per tola on August 5, from Rs88,150 per tola on January 1, 2020.

In 2019, gold rates hiked by Rs20,350 to Rs88,150 per tola by December-end, from Rs67,800 on January 1, 2019.

Khan also said rupee depreciation too had a role in this gold rally. “Silver and other metals are also increasing along with gold, but gold is moving at the fastest speed,” Khan added.

Originally published in The News