Gold shines bright, price reaches new historic high in Pakistan

• With an increase of Rs1,500 per tola, gold price settles at Rs134,300.
• Investors buy gold as a hedge against devaluation of local currency. 
• Cumulatively, gold price rises by Rs3,100 in the three days.

KARACHI: The gold price in Pakistan soared to an all-time high at Rs134,300 per tola on Thursday as currency devaluation eclipsed pressure from riskier assets to safe-haven assets.

According to the All Sindh Saraf and Jewellers Association (ASSJA), with a fresh increase of Rs1,500 per tola and Rs1,286 per 10 gram, the gold price settled at Rs134,300 and Rs115,141, respectively.

Investors buy gold as a hedge against the devaluation of their respective local currencies during inflationary days. 

The gain in gold was seen as the commodity turned positive because risk-off sentiment gripped financial markets amid the ongoing political crisis in the country.

It has maintained an uptrend for the past three successive working days in the domestic market.

With a fresh increase of Rs1,500 per tola, the commodity cumulatively rose by Rs3,100 in the three days (Tuesday-Thursday). The bullion price had stood at Rs132,800 per tola on Wednesday.

In the international market, the price of yellow metal recorded a meagre gain of $1 per ounce to settle at $1,927.

Dealers said that gold spiked to a new peak driven by the rupee devaluation. The weakening of the currency impacted the price of gold as Pakistan is a net importer of yellow metal.

A commodity dealer said that political uncertainty has caused panic everywhere and people are relocating their capital to buying gold, as some regulations have made it difficult to buy dollars for everyone.

Gold rates in Pakistan are around Rs5,000 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,520 and Rs1,303.15 today.