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Gold roars to another record high in Pakistan

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  • Bullion extends record-making run as rupee devaluation worsens.
  • Gold in Pakistan overcost by Rs5,000 per tola vs Dubai market.
  • Dealers think gold to remain unstoppable in the near term. 

Gold prices in Pakistan roared to a new record high Monday, while the rupee continued to whimper versus the dollar after being thrown to the mercy of the unruly market forces to coax the International Monetary Fund (IMF) into unlocking a stalemated loan, dealers said.

According to All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) increased by Rs1,500 per tola and Rs1,286 per 10 grams to settle at Rs210,500 per tola and Rs180,470 per 10 grams, respectively.

The jewellers’ body also said that local gold was “overcost” by Rs5,000 per tola in Pakistan, compared to the Dubai bullion market. 

Dealers, who were already eyeing the 200,000+ per tola rate since the current price hike spree, cited record-breaking rupee devaluation and a steep decline in the foreign exchange reserves in the country as major factors contributing towards the massive price hike in the bullion market.

Investors were, however, purchasing only gold bars, not jewellery, which had not only reduced goldsmiths’ profit margins but the labour force was also at the stake of losing jobs, as jewellery makers were moving towards other professions in absence of work, The News reported on Friday.

“There was a decline in purchasing power of the people as more people now use artificial jewellery,” a goldsmith said, adding that the majority of the gold makers are also moving towards artificial jewellery.

Gold in the international market edged up on a weaker dollar, as investor attention moved to several central bank meetings this week for more clarity on their rate hike strategies, with the key focus on the US Federal Reserve.

Spot gold gained 0.1% to $1,928.36 per ounce.

“Gold is easing away from a nine-month high as the US dollar and yields stabilise, as markets eagerly await the Fed’s latest policy guidance,” said Han Tan, chief market analyst at Exinity.

The dollar was 0.2% lower, making bullion, which is priced in the US currency, more attractive for customers holding other currencies.

Market participants widely expect a 25-basis-point (bps) interest rate increase from the US central bank at the end of its two-day policy meeting on February 1.

Expectations are for a slowdown in Fed rate hikes after economic data showed signs of cooling U.S. inflation, while US consumer spending fell for a second-straight month in December, putting the economy on a lower growth path heading into 2023.

Gold, which pays no interest, tends to benefit when interest rates are low as it reduces the opportunity cost of holding bullion.

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Changes in the US dollar’s value are directly correlated with variations in gold prices.

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The price of 24-karat gold in Pakistan increased by Rs1500 on Thursday, reaching Rs231,000 per tola. This was another jump in the price of gold in the country.

Dealers reported a comparable surge in the price of 10 grams of 24-karat gold, which is currently trading at Rs198,045 after rising by Rs1285. In addition, the cost of ten grams of 22-karat gold increased significantly, trading at Rs 181,541.

These fluctuations are strongly correlated with shifts in the US dollar’s value, demonstrating the tight connection between gold prices and exchange rates. This emphasizes how local gold markets are impacted by variables related to the global economy.

At Rs2,580, the price of 24-karat silver remains steady right now. The price of gold increased significantly on a global scale as well, rising by $14 to $2,214 per ounce.

It’s critical to understand that changes in the worldwide market can have a substantial impact on gold prices in Pakistan throughout the day. The gold rates that are offered are obtained from reliable sources, mostly situated in Karachi and Multan.

It is recommended that individuals seek the advice of nearby gold merchants and jewellers for the most precise and current information regarding gold prices.

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Pakistan pledged to finish building the TAPI gas pipeline.

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The minister discussed the importance of the TAPI gas pipeline project for Pakistan’s energy needs during a meeting with Turkmenistan’s ambassador to Pakistan, Atadjan Movlamov.

The Minister was congratulated by Ambassador Movlamov on taking office and his commitment to the project was noted.

Dr. Musadik Malik thanked the ambassador for his kind words, acknowledged the support, and promised to maintain the two nations’ friendship. The intergovernmental commission and working group meetings for the project this year were briefed by Atadjan Movlamov.

He invited the Minister to attend the Turkmenistan Energy Forum, which would take place in Paris the following month.

TAPI undertaking
The project is for the construction of a 1,680-kilometer pipeline with a 56-inch diameter that can carry 3.2 billion cubic feet of gas per day (bcfd) from Turkmenistan through Afghanistan and Pakistan to the border between Pakistan and India.

According to the terms of the TAPI agreement, Afghanistan would receive its portion of 0.5 billion cubic feet of gas per day, while Pakistan and India will each receive 1.325 billion cubic feet of gas per day.

In order to carry out the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, Pakistan and Turkmenistan inked a cooperative implementation plan in Islamabad on June 4.

Prime Minister Shehbaz Sharif and a delegation from Turkmenistan, led by Minister of Energy and Water Resources Daler Juma’a, were present at the ceremony.

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The price of gold is still rising in Pakistan.

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According to the All Sindh Sarafa Jewellers Association, the cost of 10 grams of 24 karat gold grew by Rs. 86 to Rs. 196,760 from Rs. 196,674, while the cost of 10 grams of 22 carat gold jumped to Rs. 180,363 from Rs. 180,284.

The price of silver per tola and ten grams stayed at Rs. 2,211.93 and Rs. 2,580, respectively.

According to the Association, the price of gold on the global market rose by $7 to $2,200 from $.2,193.

It is important to note that Pakistani and IMF personnel have agreed at the staff level on the second and final review conducted as part of Pakistan’s Stand-By arrangement.

The International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement on the second and final review of Pakistan’s stabilization program, which is supported by the IMF’s US$3 billion (SDR2,250 million) SBA Agreement. This is according to the official statement released by a team led by Nathan Porter.

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