Gold hits Rs109,350 per tola
A Reuters file image
Gold hit a new all-time high of Rs109,350 per tola (11.66 grams) in Pakistan on Thursday despite price of the imported commodity slightly slashed in international markets.
All Sindh Saraf Jewellers Association (ASSJA) reported a nominal increase of Rs50 per tola in the commodity price for local markets despite a drop of $2 to $1,806 per ounce (31.10 grams) at world markets.
The increase in local price is apparently seen due to depreciation in rupee against the US dollar, as Pakistan imports the global commodity to meet local demand. The Pakistani currency has returned to downward trend against the US dollar for the past couple of days. The massive 58% depreciation in the local currency since December 2017 has remained the single largest factor behind spiking the gold price to record high at Rs109,350 per tola.
Contrary to this, the commodity price at world markets is far behind its all-time high hit around $1,900 per ounce in 2011.
Rays Commodities former chief operating officer Adnan Agar said the other day “gold would maintain uptrend till the infection cases peak out at world, especially in the US”.
US, the current epicentre of Covid-19, has been reporting record high infection cases these days. Similarly, other countries like India and Brazil have also been reporting spike in infection cases.
The worsening situation agreed the world investors to park their savings into the safe-haven of gold to avoid deflation in their respective currencies globally. “People prefer to hold cash in hands at these testing times. However, gold is a cash commodity which simultaneously covers risk of deflation in currencies,” Agar said.
The gold may test the next resistance level of $1,840-1,850 per ounce in near future. While small corrections in the commodity price cannot be ruled out during the future rally. “The commodity would see major correction once infection cases peak out,” he said.
Published in The Express Tribune, July 17th, 2020.
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