Gold price in Pakistan jumped 2% on Saturday as the ongoing political unrest clouded the prospects of economic stability bolstering the appeal of the safe-haven asset. Data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of gold (24 carats) surged by Rs4,100 per tola and Rs3,516 per 10 grams to settle at Rs208,300 and Rs178,584.
Cumulatively, during the week ended March 18, the precious commodity gained Rs9,600, or 4.8%, per tola as gold barely responded to the appreciation of the Pakistani rupee against the US dollar. It managed to gain during all six sessions. Investors’ risk aversion was on display as political tensions sent money into safe-haven assets.
As the other markets slide investors generally find refuge in gold to maintain a low-risk profile.
A likely economic contraction looms over Pakistan amid political and economic uncertainties and a holdup in the revival of the International Monetary Fund’s (IMF) loan.
The price of gold is Rs11,500 per tola “under-cost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.
It is likely to shine through the chaos as investors adopt a guarded stance
Meanwhile, silver prices in the domestic market jumped by Rs100 per tola and Rs85.73 per 10 grams to settle at Rs2,250 per tola and Rs1,929 per 10 grams, respectively.
In the international market, gold prices surged more than 2% as a wave of banking crises shook global markets and put bullion on track for its biggest weekly rise in three years, while bets solidified for a less aggressive Federal Reserve in its fight against inflation. The per-ounce price settled at $1,989 after an increase of $53.
“Gold is surging on fears that more bad banking news could appear over the weekend and hopes that the Fed will pause its rate hikes next week,” said Tai Wong, an independent metals trader based in New York.