Monday May 23 2022

Gold scales new peak, price jumps massively by Rs2,350 per tola in Pakistan

A representational image of gold bangles. — Reuters/File
A representational image of gold bangles. — Reuters/File

  • Gold price settles at Rs141,650 per tola.
  • Surge comes on back of continuous depreciation of rupee.
  • Cumulatively, gold has gained Rs9,300 per tola since May 6.

KARACHI: Gold prices in Pakistan skyrocketed on Monday as a softer rupee and concerns regarding inflation lifted demand for the safe-haven asset.

Gold prices in the local bullion market soared by Rs2,350 per tola and Rs2,015 per 10 gram today to reach Rs141,650 and Rs121,442 amid continuous depreciation of the rupee against the US dollar.

The precious commodity closed at Rs139,300 per tola and Rs119,427 per 10 grams on Saturday.

Significant fluctuations in the local currency coupled with speculations that the rupee will further depreciate added fuel to the already surging price of the yellow metal.

Read more: Another day, another record low; rupee closes at 200.93 against US dollar

Cumulatively, the price of the yellow metal significantly gained Rs9,300 per tola since the start of the bullish spell (May 6).

Gold is considered a hedge against soaring inflation and is often used as a safe store of value during times of political and economic uncertainty.

It is worth mentioning that the precious commodity remains a safe haven against inflation (rupee depreciation and increase in essential commodity prices) and people invest in gold to avoid the impact of the devaluation of the local currency.

In the international market, the price of yellow metal significantly increased by $15 per ounce to settle at $1,862.

Read more: How a turbo-charged dollar is zooming past several Asian currencies

Gold rates in Pakistan are around Rs1,500 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market also gained Rs20 per tola and Rs17.14 per 10 grams to settle at Rs1,590 and Rs1,363.16 today.