Gold hit a new all-time high at Rs166,400 per tola (11.66 grams) on Thursday mainly due to a sharp rise in demand as people took refuge in the safe-haven asset to avoid the impact of high inflation.
The bullion price soared by Rs2,250 per tola in a day after Bloomberg reported on Wednesday that the demand for the precious metal jumped 34% year-on-year to 13 tons in Pakistan between July and September. It quoted data from the World Gold Council.
“That was the most amount of gold purchased during a quarter in at least about three years,” the international news outlet reported.
All Sindh Saraf and Jewellers Association, which announces bullion rates for local markets, said that the surge in prices was partially in line with the rise in international markets.
The price hike also came due to rupee depreciation against the US dollar as Pakistan met demand for the metal through imports.
Gold price increased by $10 to $1,784 per ounce (31.10 grams) in the international market on Thursday.
Rupee slides
Pakistani currency continued its downtick for the fourth consecutive working day on Thursday. It dropped by 0.095% (or Rs0.21) to a new two-month low at Rs224.37 against the US dollar in the inter-bank market.
The domestic currency has cumulatively decreased by 0.30% (or Rs0.68) in the past four days. Increasing demand for the foreign currency compared with lower supplies has kept the rupee on a downward path.
Import payments and foreign debt repayments by Pakistan have continued to eat into the foreign exchange reserves.
The reserves hit a four-year low at $6.7 billion in the week ended on December 2, 2022 following the repayment of foreign debt worth $2.2 billion, according to the updates released on Thursday.
Research houses anticipate the currency will depreciate to Rs240-270 against the greenback by the end of current fiscal year on June 30, 2023.
Published in The Express Tribune, December 9th, 2022.
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