Another day another high: Gold price jumps to Rs218,300 per tola

• Price of gold (24 carats) increases by Rs600 per tola.
• Silver also hits all-time high of Rs2,520 per tola.
• Gold price drops $1 per ounce in international market.

Gold price in Pakistan jumped to an all-time high and surpassed the Rs218,000 mark as the local currency slumped to a historic low against the US dollar with the country failing to bring confidence back to the market.

According to the data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) increased by Rs600 per tola and Rs514 per 10 grams to settle at Rs218,300 and Rs187,157, respectively.

The yellow metal's jump was in line with the rupee movement — which plunged 1.34 or 0.46% to 288.43 against the US dollar in the interbank market — and an increase in the weekly inflation.

Weekly inflation jumped up 0.92% week-on-week and 44.49% year-on-year during the seven-day period that ended April 6, as prices of sugar and chicken surged on account of Ramadan and likely hoarding.

Gold is often hailed as a hedge against inflation, increasing in value as the purchasing power of the dollar declines and due to the seasonal demand in the holy month of Ramadan.

Investors’ attention shifted towards the precious commodity during the week as the economic tensions continue to rise amid the International Monetary Fund (IMF) reviewing external financing commitments from friendly countries before it releases bailout funds.

The delay in the revival of the programme negatively impacted the currency market which in turn is bolstering demand for gold.

The association also mentioned that the price of gold is Rs5,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.

Meanwhile, silver prices in the domestic market also jumped to historic highs after an increase of Rs40 per tola and Rs34.30 per 10 grams to settle at Rs2,520 and Rs2,160.5, respectively.

In the international market, gold price dropped $1 per ounce to settle at $2,001.