Gold extends gains in Pakistan amid inflationary crisis
June 13, 2022
- Gold price gains Rs650 per tola to settle at Rs142,800.
- Analysts believe high inflation is in favour of precious metals.
- Silver prices in the domestic market remain unchanged.
KARACHI: Amid the financial crisis in the country, the gold price in Pakistan gained Rs650 per tola as unruly inflation and the intensifying economic and political crisis fed demand for the safe-haven metal.
According to the All Sindh Saraf and Jewellers Association (ASSJA), the price per tola gold settled at Rs142,800. Meanwhile, the price rose by Rs557 per gram to settle at Rs122,428.
The yellow metal cumulatively gained Rs2,950 or 2.12% per tola during the week ended June 11.
Read more: Financial markets take a hit as budget fails to restore investors’ confidence
The yellow metal had scaled record highs in May and remained in the range in the run-up to last week's federal budget announcement.
Prices have since moved into a steadier range as the market digested a more hawkish outlook from the depreciating rupee and falling markets.
High inflation is in favour of precious metals and analysts believe that it is not going to go away anytime soon. They believe that constant fluctuations in rupee-dollar parity were limiting the gains in gold and could force the metal to trade sideways and be choppy.
The precious commodity touched an all-time high of Rs143,600 per tola on May 24.
Read more: Pakistan optimistic about position on FATF grey list
Investors who used to pour money into foreign currencies, particularly the US dollar to avoid the impact of inflation, are now buying gold because the government and the central bank are trying to reduce the rupee-dollar parity.
Past practices suggest that people used to take aggressive positions in gold in inflationary days. In the international market, the price of yellow metal decreased by $13 per ounce to settle at $1,858.
Watch: 'Growth' budget 2022-23 at a glance
Gold rates in Pakistan are around Rs2,000 below the cost compared to the rate in the Dubai market. Meanwhile, silver prices in the domestic market remained unchanged at Rs1,540 per tola and Rs1,320.30 per 10 grams.
