Gold hit an all-time high of Rs100,400/tola partly owing to rupee depreciation and partly tracking international markets that are aiming for the sky amid a global COVID-19 pandemic that has crippled the world economy.
According to rates issued by All Sindh Saraf Jewellers Association, prices moved up by Rs700/tola on Tuesday. Rate of 10-gram gold rose Rs600 to Rs86,076. In the international market, bullion surged $31 to $1,721/ounce. The local market, however, remained closed due to lockdown in the country.
“Prices were increasing in the international market, while local market was just following the international rates,” said Al Haj Haroon Chand, president Sindh Saraf Jewellers Association. “The local market is still under cost by Rs7,000/tola compared with the rates in Dubai gold market.”
He said gold attracted investors as they amassed a lot of assets in a little space. Ahsan Mehanti, CEO Arif Habib Commodities, said besides increase in international prices and rupee depreciation, unavailability of gold was also a major reason behind price surge. “Markets are closed, source countries are also lockdown, so gold is unavailable and price moved up,” he said.
Muhammad Shafi Khan, a senior goldsmith said gold was continuously going up because of coronavirus impact. “On long term, prices will not sustain at this level once virus-related panic subsides,” Khan said adding, “Prices will come down in future”.
In the local market, buying declined along with record rupee depreciation against US Dollar, he said and added that before the lockdown, only needy people were buying gold for marriages, but they too had to cut down the weightage of the jewellery.
The goldsmith said the gold prices in the international market were chasing all-time high of $1923 per ounce when prices in Pakistan had reached Rs64,000 per tola but then rupee was stronger as it was around Rs90 per dollar. “Now rupee is weak, and impact is higher,” he said.
Khan said the coronavirus fear was so strong, it made people believe not to invest in any currency. “Investors are believing in gold only,” he said.