Gold price in Pakistan shoots to an all-time high with increase of Rs4,200

• Bullion price settles at Rs132,000 per tola in the local market with an increase of Rs4,200.
• The price of gold has surged Rs14,000 in the past week.
•  A significant depreciation of the rupee against the US dollar is the primary reason behind the spike.

KARACHI: With a fresh increase of Rs4,200 per tola on Tuesday, the price of gold in Pakistan soared to an all-time high of Rs132,000 per tola even though rates of the yellow metal in the international market remained largely range-bound over the past month.

Gold prices in the local bullion market recorded an increase of Rs4,200 per tola and Rs3,600 per 10 grams to settle at Rs132,000 per tola and Rs113,168 per 10 grams.

A significant depreciation of the rupee against the US dollar is believed to be the primary reason behind the spike given that Pakistan meets its demand for the precious metal through imports.

Meanwhile, stock market participants are diverting investment to gold because the bourse is experiencing selling pressure due to overheating of the economy.

Gold is once again attracting safe-haven investment. Analysts suggest that people usually take positions in gold during inflationary times and at present inflation is the largest challenge in Pakistan.

Read | Inflation in Pakistan at highest levels in 70 years: report

Investors who used to pour money into foreign currencies, particularly in the US dollar to avoid the impact of inflation, are now buying gold because the government and the central bank have tightened regulations pertaining to the purchase of foreign currencies in the open market.

With a fresh increase of Rs4,200 per tola on Tuesday, the price of gold surged Rs14,000 in the past week to an all-time high of Rs132,000, which was recorded on August 7, 2020.

Meanwhile, internationally, the price of gold recorded a meagre increase of $2 to settle at $1,804 per ounce in the market.

It is pertinent to mention that the gold rates in Pakistan are around Rs4,000 below cost compared to the gold rate in the Dubai market.

Meanwhile, silver prices in the domestic market recorded an increase of Rs50 per tola and Rs42.87 per 10 grams to settle at Rs1,520 per tola and Rs1,303.15 per 10 grams today.