KARACHI: Gold rates in Pakistan on Thursday reached a new all-time high, going up to Rs109,100 a tola, as the world economy continues on its path towards a recession due to the coronavirus pandemic.
According to rates issued by the All Sindh Sarafa and Jewellers Association (ASSJA), prices moved up Rs800 per tola on Thursday. The price of 10 grammes of gold was also bumped up Rs686 to Rs93,536.
In addition, the international gold rate has gone up to $12 an ounce to almost $1,814.
On the other hand, the dollar fell Rs0.18 in the interbank market to clock in at Rs166.58 by the closing bell.
The yellow metal stayed above $1,800 in the global markets — close to nearly the nine-year peak hit in the previous session — as fears of economic stagnation grew owing to the skyrocketing coronavirus cases.
Investors immediately bolted for safety from the novel virus while central banks around the world poured in powerful stimulus to cushion the pandemic’s economic fallout.
Spot gold was little changed at $1,809.19 per ounce at 1133 GMT. It had climbed to its highest since September 2011 at $1,817.71 on Wednesday. US gold futures were 0.3% lower at $1,816.
“The combination of global central bank easing, geopolitical risks, the persisting pandemic impact, and global recession could continue to push gold prices higher in the medium-term,” said Bank of China International analyst Xiao Fu.
But the analyst also said: “There’s volatility ahead … There could be some better economic data or (signs economies are) returning to normal, it could slow down the rally to a certain extent.”
Weak dollar ‘provided some support to gold’
Gold-backed exchange traded funds added 734 tonnes to their holdings in the first half of 2020 — more than in any previous full year, the World Gold Council said on Tuesday.
According to Standard Chartered analyst Suki Cooper, gold rates “have continued to benefit from safe-haven demand despite positive macro data and risk-on sentiment… Dollar weakness has provided some support to gold but the key driver remains real yields”.
Global coronavirus cases exceeded 12 million on Wednesday, with more than half a million dead. In the US, cases have been on the rise in 42 of the 50 states over the past two weeks, according to a Reuters analysis.
“For as long as COVID-19 stimulates concerns around another round of lockdowns and slowing global growth, gold may remain in fashion despite rising stock markets,” said FXTM analyst Lukman Otunuga.
Gold rates rose as much as Rs20,150 tola YTD
Among other metals, palladium climbed 1.8% to $1,951.02 per ounce, while platinum was 0.9% higher at $851.23. Silver gained 1.1% to $18.98, having earlier hit its highest since September 2019 at $19.02.
Last month, gold rates had shot to Rs105,100 a tola and Rs90,106 per 10 grammes before falling to Rs104,100 a tola and Rs89,506 for 10 grammes as of June 29.
The rising number of coronavirus infections and deaths have consistently fueled concerns about the prospects for an economic recovery around the world.
Year-to-date (YTD), one-tola and 10-gramme gold rates have respectively shot up as much as Rs20,150 and Rs17,276, with figures reported to be at Rs88,150 and Rs75,574, as of January 1, 2020.
On January 1, a dollar was equal to Rs154.99 as opposed to Rs167.24, as of reporting time.