KARACHI: A massive jump of $66 per ounce in the world market on Wednesday took the local gold price to a new peak of Rs128,700 per tola and Rs110,340 per 10 grams — registering a sharp increase of Rs4,800 and Rs4,116, respectively.
All Sindh Saraf Jewellers Association (ASSJA) fixed the price based on the world gold rate of $2,041 per ounce.
For investors, 2020 has proved a big relief in terms of meteoric price hike of Rs40,550 per tola and Rs34,766 per 10g since January 1. During this period, world bullion soared by $523 per ounce.
On January 1, one tola, 10g and world gold rates stood at Rs88,150, Rs75,574 and $1,518 per ounce, respectively.
All Pakistan Jewellers Manufacturers Association Chairman Mohammad Arshad recalled that international gold price had witnessed a massive rally in 2011, reaching to $1,933 per ounce, which has now been broken.
He said gold prices were already under pressure due to the US-China tensions followed by hectic buying by many countries especially China as a safe haven and investors’ rising interest. The Beirut explosion has further put additional pressure on the gold trade.
According to Arshad, a number of people in Pakistan are selling gold to fetch better prices.
Marriage and valima receptions have already been suspended from mid-March to control spread of coronavirus and very few in-house ceremonies are being held with limited guests.
He said after the opening of marriage ceremonies at larger venues, many people would be unable to buy gold jewellery sets in view of continuous rising prices.
ASSJA President Haji Haroon Rasheed Chand said under current circumstances, many people are coming up to sell their old jewellery sets in exchange for new designs.
Reuters adds: Gold soared to a record high on Wednesday as a weakening dollar, falling returns on US bonds and a break above historic resistance at $2,000 an ounce added momentum to buying by investors seeking a safe store of value.
As the Covid-19 pandemic has roiled markets, gold has gained nearly 35 per cent this year and is one of 2020’s best performing assets.
Investors fear economic stimulus unleashed in response to the pandemic will trigger inflation, devaluing other assets, and keeping bond yields historically low, which enhances the appeal of non-yielding gold.
US gold futures climbed 1.7pc to $2,055.30.
“There’s a level of fear in the markets which is almost palpable,” said independent analyst Ross Norman.
“Momentum is feeding on itself, based upon real concerns about the failure of the macro economy to show any meaningful signs of recovery.”
Many analysts say gold’s rally has been so fast a short-term fall in prices and period of consolidation is likely.