KARACHI: The gold price hit a new record high at Rs70,300 per tola (11.66 grams) on Friday despite contraction in the global commodity market.
The All Sindh Saraf and Jewellers Association announced an increase of Rs400 per tola to Rs70,300 at around 4pm for domestic markets. Simultaneously, it reported that the yellow metal dropped $3 per ounce (31.10 grams) to $1,312 in the world market.
“Rupee depreciation (against the US dollar) forced us to increase the price of imported commodity in Pakistan’s gold market, though it shed value in the world market,” Association President Haji Haroon Chand told media.
With a fresh drop of Rs0.75, the rupee has cumulatively shed 1.70 to the US dollar in the inter-bank market in the past two weeks on speculation that Pakistan had agreed with the International Monetary Fund (IMF) to let the currency depreciate ahead of obtaining a bailout.
Pakistan, a relatively smaller bullion market which largely relies on imports, issues gold prices on a daily basis after incorporating different factors including gold rates in world markets, movement in the US dollar in international and domestic markets and bullion demand-supply in the domestic market.
BIPL Securities said in comments to its clients that gold extended losses in the world market on Friday, moving further away from a three-week peak hit in the previous session as appetite for riskier assets (like stocks) improved on upbeat US economic data. Still, the precious metal was on path for a third straight weekly gain, it said.
Haroon Chand said they had increased gold prices following depreciation of the rupee, though there was almost no demand for gold from genuine buyers. “There is little demand for gold, but that is from investors and not the people who usually buy the precious metal for marriages of their loved ones,” he said.