Gold hit a new record high of Rs109,100 per tola (11.66 grams) in Pakistan on Thursday, as the global commodity maintained uptrend along with continuous surge in new Covid-19 infection cases especially in the US.
“Gold would maintain uptrend till the infection cases peak out at world, especially in the US,” Rays Commodities former chief operating officer Adnan Agar said while talking to Pak Revenue.
US, the current epicentre of Covid-19, reported record high of 61,000 infection cases in a day on Wednesday. Similarly, India and Brazil have also been reporting record high infection cases these days.
The worsening situation prompted the world investors to park their savings into the safe-haven of gold to avoid deflation in their respective currencies globally. “People prefer to hold cash in hand in these testing times. However, gold is a cash commodity which simultaneously covers risk of deflation in currencies,” Agar said.
US experts are now anticipating peak in infection cases by mid of August, which is almost 5-6 weeks away.
The precious yellow metal hit nine-year high of $1,826 per ounce (31.10 grams) during the day in world markets. This led All Sindh Saraf Jewellers Association (ASSJA) to revise up the commodity price by Rs800 per tola to Rs109,100 for local markets.
Gold may test the next resistance level of $1,840-1,850 per ounce in the near future. While small corrections in the commodity price cannot be ruled out during the future rally. “The commodity would see major correction once infection cases peak out,” he said.
The analyst said central banks across the world, including Pakistan, have significantly cut the benchmark interest rate in a bid to revive economic activities. “The development has made investment in fixed income assets unattractive, while investors are avoiding taking risk of investing in stocks these days. Therefore, gold has become a safe-haven under the current scenario,” he said.