It hit a fresh all-time high of Rs136,000 per tola (11.66 grams) in Pakistan on Thursday, providing protection to investors from rupee depreciation.
According to the All Sindh Sarafa Jewellers Association (ASSJA), the price of gold per tola rose by Rs300. Meanwhile, the price rose by Rs257 per 10 grams to settle at Rs116,598.
With the latest increase of Rs300 per tola today, the gold price has surged by a total of Rs4,000 in the last six sessions (Friday-Thursday).
Gold has emerged as a safe asset in these challenging times of the economic crisis. People were aggressively buying gold to protect their cash from deflation.
The drop in the rupee value — which slumped to an all-time low of Rs191.77 against the US dollar in the interbank market — forced the gold trading body to revise up the bullion price significantly as Pakistan meets the local demand for the precious yellow metal through imports.
Earlier, commenting on the rising prices, a gold dealer had said that the metal remains a safe haven against inflation (rupee depreciation and increase in essential commodity prices) and people invest in gold to avoid the impact of the devaluation of the local currency.
He predicted that the gold price will continue to hover at a high level along with the depreciating rupee as the market sees the local currency crossing the critical 200-mark.
However, despite the wedding season, the demand in the market remains subdued due to a lack of purchasing power.
In the international market, the price of yellow metal recorded a decrease of $6 per ounce to settle at $1,846.
Gold rates in Pakistan are around Rs1,000 below the cost compared to the rate in the Dubai market.
Meanwhile, silver prices in the domestic market rose significantly by Rs60 per tola and Rs51.44 to settle at Rs1,560 and Rs1,337.44 today.