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Gold price crosses Rs200,000 for the first time as rupee falls to record lows. The price of gold in Pakistan surpassed the important psychological threshold of Rs200,000 per tola for the first time on Friday, according to traders, who blamed the spike on the rupee's uncontrolled slide after money changers abandoned a self-imposed restriction on the exchange rate.
According to data from the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), 24-carat gold prices grew by Rs7,000 per tola and Rs6,000 per 10 gramme, respectively, to settle at Rs202,500 per tola and Rs173,610 per 10 gramme.
Goldsmiths, who were previously anticipating a jump in yellow metal pricing, attributed the large spike in the bullion market to the record-breaking rupee depreciation and a rapid decrease in Pakistan's foreign exchange reserves.
Since January 20, the gold price has risen by Rs17,200 per tola as the rupee has continued to fall against the US dollar.
Investors, on the other hand, were buying gold bars rather than jewellery, which not only lowered goldsmiths' profit margins but also put the labour force at risk of losing employment, as jewellery manufacturers moved to other professions in the lack of work, according to The News on Friday.
"There has been a drop in people's purchasing power as more people now use artificial jewellery," a goldsmith stated, adding that the majority of gold manufactures are now shifting to artificial jewellery.
Gold prices jumped by Rs18,600, or 10.11%, to Rs202,500 per tola on December 31, 2022, from Rs183,900 per tola the previous day.
Gold rates fell by $6 to $1,930 per ounce in the international market as strong US economic data was regarded as grist for the Federal Reserve to keep interest rates high for longer, but caution ahead of inflation data and the policy meeting next week kept a floor under bullion prices.
According to financial experts, gold is reaching new highs on a daily basis as investors flock to it because another safe bet, the dollar, is currently difficult to come by for a variety of reasons ranging from allegedly artificially maintained exchange rates to a massive disparity between legal and illegal money markets.
They went on to say that the precious metal normally follows global prices, which were under pressure owing to the US Federal Reserve's hawkish policies.
Pakistan, the world's fifth-most populated country, is facing a number of economic issues, including a dollar shortage and a delay in the IMF's lending programme for the country.
"Gold prices are expected to rise higher as investors remain wary of a record drop in foreign exchange reserves," a goldsmith said.
Meanwhile, silver prices in the domestic market rose by Rs50 per tola and Rs42.86 per 10 gramme, respectively, to an all-time high of Rs2,200 and Rs1,886.14.
