Karachi, October 19, 2024: On Friday, for the third consecutive working day, gold in Pakistan broke through the Rs 280,000/tola (11.66 grams) barrier for the first time, setting a new record high by worldwide patterns.
In the local market, the precious metal has risen Rs 5,900 over the last three days, reaching a new record high of Rs 280,900/tola after a steep increase of Rs 3,000/tola on Friday.
The increasing foreign exchange supply in the local economy has fueled the Pakistani rupee’s upward trend for the second day. In the meantime, it gained Rs0.18 to Rs277.61 against the US dollar in the interbank market.
According to the All Pakistan Sarafa Gems and Jewelers Association, the continuous increase in gold prices is consistent with a positive trend in international markets. Globally, bullion increased by $30/ounce (31.10 grams), hitting a fresh peak of $2,712 on Friday in Asian markets.
Rising Middle East and European geopolitical tensions, as well as the uncertainty surrounding the US presidential election in November, are the main causes of the steady increase in gold prices. Furthermore, as central banks lowered interest rates and implemented global monetary easing, foreign investors are turning to gold as a haven.
Also read: Gold Prices Reach New Heights Across Markets
The price of the product has increased by $900/ounce in the last year, from about $1,800/ounce before Israel’s October 2023 attack against the Palestinians. At the same time, the ongoing war between Russia and Ukraine continues to be a worldwide hot spot in Europe.
However, the steady increase in Pakistan’s foreign exchange reserves (owned by the State Bank of Pakistan/SBP) over the previous 12 weeks has helped the country’s currency continue to appreciate against the US dollar.
In the week ending October 11, the FX reserves increased by an additional $215 million, surpassing the $11 billion threshold. Over the previous three months, these reserves have increased by $2 billion, with the IMF’s first loan tranche in late September accounting for half of the growth.