Gold shines as rupee plunges to historic low

• Gold price recorded an increase of Rs1,000 per tola in the local market to settle at Rs123,800.
• "Buyers are purchasing cautiously after analysing the rumours spreading in the market," a gold dealer says.
• The price of gold in the global market increased by $7 settling at $1,794.

KARACHI: Gold price in the local market recorded an increase of Rs1,000 per tola on Monday as the local currency plunged to a record low.

The yellow metal's price thus hit Rs123,800 per tola and increased by Rs857 to Rs106,138 per 10 grams.

A day earlier, the precious commodity closed at Rs122,800 per tola and Rs105,281 per 10 grams.

Speaking to Geo.tv, a gold dealer said that the local demand in the market is almost flat because the gold is around $2,500 under cost.

"Buyers are purchasing cautiously after analysing the rumours spreading in the market," he said.

He was of the view the price of the precious commodity will decrease in the days to come after Pakistan receives funds worth $3 billion from Saudi Fund for Development.

In the international market, the gold prices edged higher as concerns over the impact of the Omicron coronavirus variant offset a stronger dollar, with investors assessing whether the emergence of the variant could change the US Federal Reserve's hawkish stance.

The price of gold in the global market increased by $7 settling at $1,794.

"Given the uncertainty around whether this new variant is more dangerous than the Delta variant, gold's downside should be protected," Harshal Barot, a senior research consultant for South Asia at Metals Focus, said, adding that it could trade between $1,780 and $1,830.

It is pertinent to mention that gold rates in Pakistan are around Rs2,500 below cost compared to the gold rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,460 per tola and Rs1,251.71 per 10 grams.

— With additional input from Reuters