Gold shines once again, as it hit all-time high of Rs102,000 per tola (11.66 grams) in Pakistan on Monday after investors relocated capital from deflating global currencies, mainly the US dollar, to the inflating precious metal.
The gain in gold was seen as the commodity tested seven-and-a-half-year high above $1,760 per ounce (31.10 grams) at world market during the day.
It maintained uptrend for the past three successive working days at both global and domestic markets.
With a fresh increase of Rs1,300 per tola on Monday, the commodity cumulatively rose Rs3,400, or 3.5%, in the three days (Thursday-Monday) to Rs102,000 per tola.
“Investors took the move (relocating capital to gold) ahead of likely outbreak of second wave of the coronavirus pandemic in the world,” Rays Commodities’ former chief operating officer Adnan Agar said while talking to Pak Revenue.
The sudden increase in number of global infection cases – especially in the top two most affected countries the US and Brazil – over the weekend has hinted emergence of a second wave of Covid-19. “History suggests second wave of pandemic hits harder than the outbreak. Fortunately, the death ratio has remained low despite the sudden surge in new infection cases,” he said.
Gold would surpass $1,800 per ounce if the second wave of Covid-19 emerges with surge in death rate. It may return to downward trend and test below $1,700 if the death rate remains low, he said.
He said that global currencies have started losing their value since governments and central banks around the world have injected billions to trillions of dollars to support people and businesses and revive economic activities in these testing times.
The development convinced investors to relocate their capital from weakening currencies to the strengthening gold, he said.
All Sindh Saraf Jewellers Association (ASSJA) President Haji Haroon Chand said Pakistan is selling gold at cheapest price in the Asian regions despite the latest increase in its price over the past three days. “Dubai is selling gold at a price Rs8,000 per tola higher than Pakistan,” he said.
Pakistan remains a small market for gold at global level. It, however, meets the commodity demand through imports as it does not produce the commodity locally. Accordingly, the gold price for the local markets is determined keeping in view its price at world markets, rupee-dollar exchange rate and its demand and supply at local markets. The rupee closed stable at Rs166.58 to the US dollar at inter-bank market on Monday compared to Friday’s close of Rs166.63.
The rupee stood stable after the international financial institutions agreed to lend more to Pakistan and global lenders deferred Pakistan debt repayment for about one year.
