Gold hit a new all-time high on Tuesday as it soared to Rs123,900 per tola (11.66 grams) in Pakistan and tested the $2,000-per-ounce peak in the world market.
The commodity has consistently surged to record highs in the country for the past few weeks in line with the uptrend in the global market as investors fled to safe-haven assets amid the pandemic.
Gold prices charged towards $2,000 an ounce for the first time in the international market, before retreating somewhat, after the Democrats and the White House appeared closer to an agreement on a new stimulus to help the coronavirus-hit economy.
The latest surge in the commodity is seen as a refuge amid economic uncertainty. Gold prices have risen more than 30% this year as the coronavirus outbreak has weakened the global economy and clouded the outlook.
Commenting on the reasons behind the uptrend, Rays Commodities’ former chief operating officer Adnan Agar told The Express Tribune that mounting coronavirus cases in the US and other parts of the world, coupled with the World Health Organisation’s warning that the road to normality would be long, with some countries requiring a reset of strategy, prompted investors to flee to safe-haven assets.
“Global central banks have rolled out massive stimulus measures and cut interest rates to mitigate the economic damage caused by the pandemic, helping gold to rise more than 30% so far this year,” he added.
“On the technical front, gold prices are facing strong resistance at $2,000 per ounce but any news regarding new monetary stimulus from the US Federal Reserve can trigger a break.”
(WITH ADDITIONAL INPUT FROM AGENCIES)
Published in The Express Tribune, August 5th, 2020.
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