Gold hovers near one-week peak in Pakistan on rupee slide

• Gold price settles at Rs178,200 per tola.
• Prices rise by Rs700 per tola and Rs600 per 10 grams.
• Silver price remains unchanged at Rs2,020 per tola.

Gold extended gains on Monday edging near a week's peak despite muted trading in the international market as Pakistani currency continued to depreciate against the US dollar.

According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the prices of gold rose by Rs700 per tola and Rs600 per 10 grams to settle at Rs178,200 and Rs152,778.

Gold prices have been rising for the last many days and have cumulatively gained Rs17,000 or 10.5% per tola since December 1, raising concerns about whether the soaring price is sustainable or constitutes an unsustainable bubble.

Cumulatively, the price of precious commodity gained Rs4,800, or 2.77%, per tola during the week ended December 24. The per tola gold price touched an all-time high of Rs180,650 on December 22.

In the international market, gold price was unchanged at $1,798 as most markets remained closed for the Christmas holiday.

It should be noted that the APSGJA notifies the gold rates to the market every day after determining the price by keeping in view its rates in world markets, the rupee-dollar exchange rate, and demand and supply in domestic markets.

Pakistan, however, has seen days recently when the bullion recorded a reduction in its price in international markets, but local pricing bodies kept ballooning the commodity price in the country amid high demand and low supply scenarios for the metal.

Analysts believe that the unavailability of the dollar in Pakistan and the widening difference between interbank and open market exchange rates triggered the recent price hike; however, grey markets of the precious commodity have also added fuel to the speculations.

Meanwhile, silver prices remained unchanged at Rs2,020 per tola and Rs1,731.82 per 10 grams, respectively.