Wednesday Jan 26 2022

Gold price extends gains in Pakistan, rises by Rs500 per tola

Image showing stacks of gold bars — Reuters/File
Image showing stacks of gold bars — Reuters/File

  • Gold price rise by Rs500 per tola to close at Rs127,150.
  • Price in the local bullion market up by Rs429 per 10 grams.
  • Dealers say there is no demand in the local market.

KARACHI: In line with the international market, the gold price in Pakistan extended gains on Wednesday amid depreciation in the Pakistani rupee.

The price of the precious commodity rose by Rs500 per tola and Rs429 per 10 grams to settle at Rs127,150 and Rs109,011, respectively.

Cumulatively, the safe-haven asset has gained Rs1,300 per tola during the last four sessions.

However, gold dealers said that due to a lack of purchasing power, there is no demand in the local market.

In the international market, gold recorded a slight increase of $7 per ounce to settle at $1,845 as investors sought the safety of bullion amid the Ukraine-Russia crisis, with strength in the US dollar weighing on the metal ahead of an imminent rate hike by the US Federal Reserve.

Interest rate hikes would raise the opportunity cost of holding non-yielding gold, but bullion has remained supported of late on safe-haven demand from the ongoing tensions over Ukraine and market volatility.

Local gold dealers suggest that prevailing uncertain economic conditions have sparked a flight from risky commodities towards safer commodities as gold is considered one of the safest investments; hence, its price is skyrocketing as an investment is pouring in at a rapid pace.

As the dollar continues to strengthen day after day, investors' confidence in the currency has tumbled and they have diverted their investment to gold.

It is pertinent to mention that the gold rates in Pakistan are around Rs1,000 below cost compared to the gold rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,470 per tola and Rs1,260.28 per 10 grams today.

— With additional input from Reuters