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business
Friday Aug 07 2020
By
Web Desk

Gold rate breaks through Rs132,000-a-tola mark, marking historic high

By
Web Desk
Gold prices in the international markets went up $4 an ounce to $2,054. REUTERS/Francis Mascarenhas/Files

KARACHI: Gold rates in Pakistan rose Rs2,500 per tola on Friday, the All Sindh Sarafa and Jewellers Association (ASSJA) said, marking a historic high, with prices around the world shooting up as well amid weak investor confidence in stocks over economic woes and resurgence in coronavirus cases.

With the latest bump in rates, gold is now priced at Rs132,000 per tola. Similarly, the gold rate for 10 grammes climbed Rs2,144 to reach Rs113,169, according to the ASSJA.

On the other hand, gold prices in the international markets went up $4 an ounce to $2,054.

Read more: Gold rates in Pakistan continue rallying, eyeing Rs130,000-a-tola mark

Analysts across the world continue predicting more gains in gold given the speed at which the yellow metal broke through $2,000-an-ounce mark a couple of days ago, leaving some in the market fearing a correction as the coronavirus crisis spurs investors to buying into bullion’s relative safety.

Soaring gold rates erode lustre in retail hubs

Physical gold remained out of favour in most Asian hubs this week as a worsening pandemic kept retail buyers away with global benchmark spot prices at historic highs, while logistical challenges plagued the Indian market.

Spot gold scaled a record $2,072.50 per ounce on Friday.

Dealers in top buyer China offered discounts of $70-60 per ounce against the benchmark versus last week’s record $88-42 range.

“Young people have no interest in buying gold jewellery and due to the pandemic, there are no tourists,” said Peter Fung, head of dealing at Wing Fung Precious Metals.

In Hong Kong, dealers charged anywhere between a $2 per ounce discount to a $1.5 premium.

'Few investors are buying coins and bars'

“Selling has increased and the Chinese are more willing to trade silver,” said Samson Li, a Hong Kong-based analyst at Refinitiv GFMS.

In India, premiums eased to about $4 an ounce over official domestic prices, as opposed to last week’s $8.

Limited supplies due to suspension of international flights has been allowing dealers to charge premiums, said a Mumbai-based dealer with a bullion importing bank.

Local gold futures soared to a record INR56,191 per 10 grammes on Friday.

“A few investors are buying coins and bars but their share is tiny in the overall market,” said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in the city of Kolkata.

'Never seen such kind of demand destruction'

In Singapore, premiums were unchanged at $0.8-$1.50, while Japan saw premiums of $0.50.

Investors sold gold to take profits, while high net worth clients awaited a price correction to accumulate more metal, said Brian Lan of Singapore dealer GoldSilver.

Meanwhile, the Bangladesh Jewellers Association raised local rates to a new record of 77,215 taka ($912.38) per Bhori, or 11.664 grams.

“We’ve never seen such kind of demand destruction happening,” said Dilip Kumar Agarwala, the association’s general secretary.