As the country continues to go through one of its worst economic crises and inflation surged to unprecedented levels, people flocked to buy gold, propelling the precious metal’s value to a new all-time high.
The price of gold (24 carats) jumped by Rs1,500 per tola and Rs1,286 per 10 grams to reach Rs221,000 and Rs189,472, respectively, according to data provided by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA).
The gold rate has been on a steady uptrend in Pakistan, as economic fundamentals weakened, the rupee depreciated and inflation soared to record highs. During such times, people prefer to buy the precious metal to protect themselves against inflation and currency depreciation.
The rupee had fallen to an all-time low of Rs288.43 against the US dollar in the interbank market on April 11. While it has recovered since then, the US dollar continues to trade above Rs280.
On Tuesday, the rupee lost Re0.08 or 0.03% against the greenback to close at Rs283.92 in the interbank market.
Meanwhile, inflation in April clocked in at 36.4% year-on-year — a record high — which means Pakistan has the fastest rising prices in Asia, beating even Sri Lanka where inflation was measured at 35.3% in the previous month.
Another reason for the increased gold demand is the delay in an agreement with the International Monetary Fund (IMF) for a desperately needed economic bailout, without which the country risks default.
The delay in the revival of the IMF programme negatively impacts the currency market which, in turn, bolsters the demand for gold.
Meanwhile, the price of gold remained unchanged at $1,990 per ounce in the international market.
Data shared by the association showed that the price of silver rose by Rs130 per tola and Rs111.45 per 10 grams to settle at Rs2,730 and Rs2,340.53, respectively — which the APSGJA were also record highs.