Gold Prices Surge to Record High of Rs287,900 per Tola

KARACHI: On Wednesday, gold prices soared by Rs2,900, reaching a new all-time high of Rs287,900 per tola (11.66 grams), driven by rising trends in global markets. Meanwhile, the Pakistani rupee fell by Rs0.05, hitting a one-week low of Rs277.79 against the US dollar in the inter-bank market, marking its third consecutive day of decline.

The All-Pakistan Saraf Gems and Jewellers Association reported that international gold prices rose by $29, reaching a record high of $2,784 per ounce (31.10 grams). This surge in gold prices, often viewed as a safe-haven asset, comes just ahead of a meeting next week by the US central bank to consider a potential second consecutive interest rate cut in four years. Such cuts typically shift investment from bonds to gold.

Additionally, increasing political uncertainty in the US, with the presidential election approaching in November, has led to significant purchases of gold. The tight race between candidates Donald Trump and Kamala Harris has further fueled this demand, as the outcome remains uncertain.

According to data from the State Bank of Pakistan (SBP), the Pakistani rupee has depreciated a total of Rs0.16 against the dollar over the past three days, due to rising demand for the greenback coupled with a slower supply. Deputy Prime Minister and former finance minister Ishaq Dar stated that the fair value of the rupee is below Rs240/$, which is approximately Rs38 lower than the current exchange rate. He criticized the International Monetary Fund (IMF) for its recommendation to adopt a market-based exchange rate, which he claims has led to unnecessary depreciation of the local currency.

The Exchange Companies Association of Pakistan reported that the rupee fell by Rs0.06 on a day-to-day basis in the open market, closing at Rs278.72 per dollar.