Gold price soars to Rs90,000 per tola

Takes cue from global market where precious metal hit six-year high

KARACHI: Gold price soared to a record high of Rs90,000 per tola (11.66 grams) in Pakistan on Wednesday after the yellow metal hit a six-year high in the world market.

All Sindh Saraf and Jewellers Association (ASSJA) revised the bullion price up by Rs900 to Rs90,000 per tola after the precious metal, considered a safe haven, surged $15 per ounce (31.10 grams) to the six-year high at $1,545 in the London market during the day.

“The US-China trade war kept impacting the world economy. The situation invited extensive buying of bullion across the world,” Association President Haroon Chand said while talking to The Express Tribune.

He said the trade war between the two biggest economies of the world had not only impacted their respective currencies but also the currencies of other nations.

“The situation prompted many, including Russian and Chinese central banks, to convert their foreign currency reserves into gold in order to escape losses in the aftermath of depreciation of their currencies,” he said.

In the recent past, China devalued its currency to almost 11-year low to keep its exports to the US unaffected after Washington increased duties on imports from Beijing.

Central banks around the world, including Federal Reserve of the US, have cut their key interest rates to encourage businesses to borrow money for new ventures and help revive their respective economies. Haroon, however, said the jump in the bullion price had further slowed down sales of gold and its ornaments in the country because the increase had badly squeezed purchasing power of the common man.

“The overall demand for the commodity has dropped to 2,000-3,000 tola per day in the country compared to around 10,000 tola a few years ago,” he said.

“Investment in gold has, however, paid a higher return to local investors compared to investment in the US dollar,” he said. He was of the view that bullion might test new highs in the domestic and international markets in the days and weeks to come. “Gold may test $1,560-1,570 per ounce this week or next,” he said.

Published in The Express Tribune, August 29^th, 2019.

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