Gold hits fresh peak at Rs287,900 a tola

The price of gold on Wednesday spiked Rs2,900 to a new all-time high at Rs287,900 per tola (11.66 grams), which took cue from the uptrend in global markets.

On the other hand, Pakistani currency edged down Rs0.05 to a one-week low at Rs277.79 against the US dollar in the inter-bank market, maintaining its downward movement for the third consecutive day. All Pakistan Saraf Gems and Jewellers Association reported that bullion soared $29 to a new record high at $2,784 per ounce (31.10 grams) in the international market.

The surge in gold – called a safe-haven asset – comes ahead of the US central bank meeting early next week to consider a second straight reduction in interest rate in four years. Any rate cut drives investment from bonds to the precious metal.

Moreover, heightened political uncertainty in the US before presidential election in November triggered extensive buying of the precious metal as poll outcome could be in favour of any of the two contending candidates – Donald Trump and Kamala Harris – because they were neck and neck in the race.

According to the State Bank of Pakistan's (SBP) data, the Pakistani rupee has depreciated a cumulative Rs0.16/$ in the past three days in the wake of rising demand for the greenback and its relatively slower supply. Deputy Prime Minister and former finance minister Ishaq Dar, however, claimed that fair value of the rupee stood below Rs240/$, which was lower by around Rs38 compared to the current exchange rate.

He lashed out at the International Monetary Fund (IMF) for its recommendation to Pakistan to follow a market-based exchange rate that caused unnecessary depreciation of the local currency.

Exchange Companies Association of Pakistan reported that the rupee depreciated Rs0.06 on a day-on-day basis in the open market and closed at Rs278.72/$.