Gold extends gains in Pakistan amid inflationary crisis
- The price of gold increased by Rs650 per tola to Rs142,800.
- Analysts feel that rising inflation favors precious metals.
- In the domestic market, silver prices are stable.
KARACHI: In the midst of Pakistan’s financial crisis, the gold price increased by Rs650 per tola, as uncontrollable inflation and the country’s deepening economic and political crises fueled demand for the safe-haven commodity.
The price per tola gold settled at Rs142,800, according to the All Sindh Saraf and Jewellers Association (ASSJA). Meanwhile, the price of gold increased by Rs557 per gram to Rs122,428 per gram.
During the week ending June 11, the yellow metal gained Rs2,950 per tola, or 2.12 percent.
In the run-up to last week’s federal budget release, the yellow metal had reached record highs in May and remained in the range.
As the market assimilated a more hawkish perspective from the sinking rupee and dropping markets, prices have since shifted into a more stable range.
High inflation favors precious metals, and economists expect it will continue to do so in the near future. Constant changes in the rupee-dollar parity, they fear, are restricting gold’s gains and may drive the commodity to trade sideways and choppy.
On May 24, the precious metal reached an all-time high of Rs143,600 per tola.
Because the government and the central bank are attempting to lessen the rupee-dollar parity, investors who previously poured money into foreign currencies, mainly the US dollar, are now buying gold to escape the impact of inflation.
People used to take aggressive positions in gold during inflationary times, according to past trends. The price of yellow gold fell $13 per ounce on the international market, settling at $1,858 per ounce.
When compared to the Dubai market, gold prices in Pakistan are roughly Rs2,000 lower. Meanwhile, domestic silver prices stayed constant at Rs1,540 per tola and Rs1,320.30 per ten gram.