Gold shines as rupee plunges to historic low

• Gold price rises by Rs700 per tola to settle at Rs130,700.
• "Buyers are purchasing cautiously after analysing rumours spreading in the market," a dealer says.
• Silver prices increase by Rs10 per tola to settle at Rs1,510.

KARACHI: Gold price in the local market recorded an increase of Rs700 per tola on Monday as the local currency plunged to a record low of Rs181.25 against the US dollar in the interbank market.

The yellow metal's price thus hit Rs130,700 per tola and increased by Rs600 to Rs112,054 per 10 grams.

A day earlier, the precious commodity closed at Rs130,000 per tola and Rs111,454 per 10 grams.

Speaking to Geo.tv, a gold dealer said that the local demand in the market is almost flat because the gold is around $5,500 under cost.

"Buyers are purchasing cautiously after analysing the rumours spreading in the market," he said.

The dealer further added that it seems like gold now have seen its bullish surge fade for the time being.

Gold is seeing pressure from the geopolitical tensions in the wake of Russia-Ukraine talks, which are slowing the rush to safe-havens, and as interest rate hikes by the Federal Reserve and the Bank of England confirm the hawkish trajectory central banks globally are adopting to tackle inflation.

In the international market, gold prices edged up as fighting in Ukraine buoyed demand for the safe-haven asset, although strength in US bond yields restricted bullion's gains

Gold rates in Pakistan are around Rs5,500 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market recorded an increase of Rs10 per tola and Rs8.58 per 10 grams to settle at Rs1,510 and Rs1,294.58 today.