Gold breaks all records, price soars to Rs217,000 per tola in Pakistan

People buy jewellery at a jewellery store in Amritsar on October 22, 2022. — AFP/File

After the rupee fell to a new low against the US dollar in the interbank market, the gold rate surged to an all-time high in Pakistan and jumped past Rs215,00 per tola.

The price of gold (24 carats) soared by Rs2,500 per tola and Rs2,142 per 10 grams to settle at Rs217,000 and Rs186,042, according to the data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA).

The surge was in line with the rupee movement — which plunged to an all-time low of Rs287.85 against the US dollar in the interbank market — and an uptrend in the global markets.

Gold is often hailed as a hedge against inflation—increasing in value as the purchasing power of the dollar declines.

Pakistan’s monthly inflation blew past forecasts in March and soared to a nearly all-time high level — 35.4% — from a year earlier, with people feeling more pain from some of the fastest rising consumer prices amid straining budgets as cost of living continues to outstrip average incomes.

Cumulatively, the precious commodity gained Rs8,700 per tola during the three sessions (Monday-Wednesday).

Investors’ attention shifted towards the precious commodity during the week as the economic tensions continue to rise amid the International Monetary Fund (IMF) reviewing external financing commitments from friendly countries before it releases bailout funds.

The delay in the revival of the programme negatively impacted the currency market which in turn is bolstering demand for gold.

Gold price moves in line with the rupee-dollar parity as the country meets almost all its gold demand through imports, and traders follow its international price in setting rates in the country.

Jewellers import the metal against the US dollar and UAE dirham before converting its price into rupees.

Moreover, a hike in seasonal demand added fuel to the rising prices in the local bullion market.

The association also mentioned that the price of gold is Rs10,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.

Meanwhile, silver prices in the domestic market remained stable at Rs2,450 per tola and Rs2,100.48 per 10 grams. In the international market, gold price gained $41 per ounce to settle at $2,023.

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