The gold rate in Pakistan rose sharply on Monday, reaching a historic high due to the country’s struggle to secure external financing amid a slump in the Pakistani rupee against the US dollar. The All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) reported that the price of gold (24 carats) surged by Rs3,100 per tola and Rs2,656 per 10 grams, settling at Rs217,700 and Rs186,643, respectively. The increase in gold prices was in line with the decline in the Pakistani rupee’s value, which fell 2.44% against the US dollar in the interbank market, as well as a rise in weekly inflation.
Investors have been turning to gold due to the economic tensions that continue to rise, as the International Monetary Fund (IMF) reviews external financing commitments from friendly countries before releasing bailout funds. This delay in the revival of the programme has negatively impacted the currency market, which is further bolstering the demand for gold.
Gold is often seen as a hedge against inflation, and its value typically increases as the purchasing power of the dollar declines. Additionally, the seasonal demand for gold during the holy month of Ramadan is another factor contributing to its rise in prices.
Although the prices of gold and silver in Pakistan have been increasing, the association noted that the Pakistani gold market is currently cheaper than the global market, with gold being priced at Rs5,000 per tola “undercost” compared to Dubai’s market. Meanwhile, in the international market, gold prices dropped by $6 per ounce, settling at $2,002.
