Gold hits record Rs280,000

Rupee benefits from improved foreign currency supply; appreciates to Rs277.61/$

KARACHI:

In Pakistan, gold has surpassed the Rs280,000/tola (11.66 grams) mark for the first time, reaching a new all-time peak in line with global trends, maintaining its record-breaking streak for the third consecutive working day on Friday.

With a sharp increase of Rs3,000/tola on Friday, the precious metal has cumulatively surged by Rs5,900 over three days, hitting a new record high of Rs280,900/tola in the domestic market.

Meanwhile, the Pakistani rupee appreciated by Rs0.18 to Rs277.61 against the US dollar in the interbank market, continuing its upward trend for the second successive day, driven by improved foreign currency supply in the local economy.

The All Pakistan Sarafa Gems and Jewellers Association reported that the ongoing rise in gold prices aligns with an uptrend in global markets. Internationally, bullion rose by $30/ounce (31.10 grams), reaching a new all-time high of $2,712 in the Asian markets on Friday.

The sustained rise in gold prices is attributed to escalating geopolitical tensions in the Middle East and Europe, along with uncertainty surrounding the upcoming US presidential election in November. Additionally, global monetary easing, with central banks cutting interest rates, is prompting international investors to seek refuge in gold as a safe haven.

Over the past year, the commodity has surged by $900/ounce, up from around $1,800/ounce before Israel's aggression against Palestinians in October 2023. Simultaneously, the ongoing Russia-Ukraine conflict remains a global flashpoint in Europe.

On the other hand, Pakistan's domestic currency has continued to strengthen against the US dollar, supported by the consistent growth in the country's foreign exchange reserves (held by the State Bank of Pakistan/SBP) over the past 12 weeks.

The FX reserves surpassed the $11 billion mark, with a fresh increase of $215 million in the week ending October 11. These reserves have grown by a cumulative $2 billion over the past three months, with half of the increase stemming from the IMF's first loan tranche in late September.