KARACHI: The price of gold in Pakistan gained Rs1,400 per tola to reach an all-time high of Rs134,400 per tola on Tuesday as the local currency touched the all-time low against the dollar.
The precious metal recorded the previous high of Rs134,300/tola on April 7, amid continuous depreciation in the value of rupee against the dollar.
The local unit remained under pressure amid worsening macroeconomic indicators where the forex reserves of the State Bank of Pakistan (SBP) are on a continuous decline due to the external debt repayment coupled with the widening of the current account and trade deficit.
The government is trying hard to secure the next tranche of loan from the International Monetary Fund (IMF) to support its reserves but with no success till yet, while the SBP’s foreign exchange reserves largely depleted due to debt repayments and government payments.
Gold 24 karat gained Rs1,400/tola and Rs1,200/10 grammes in the local market to hit Rs134,400/tola and Rs115,226/10grammes.
The price of silver remained unchanged in the local market at Rs1,500/tola and Rs1,286/10 grammes, while the international silver prices were recorded at $21.95 per ounce on Tuesday.
The political and economic instability in the country, uncertainty regarding the new round of talks with the IMF and higher commodity prices in the international market had a negative effect on the stability of the rupee.
The yellow metal extended gains as the local unit dived to the fresh low due to higher demand for the dollar from the importers, ever widening trade and current account deficit and reduced inflows.
The SBP’s reserves recorded a decline of $59 million to $10.5 billion during the week ending April 30. The reserves held by commercial banks fell to $6.0 billion.
The total liquid foreign reserves held by the country stood at $16.5 billion, compared with $16.6 billion in the previous week.
Pakistan’s foreign exchange reserves fell by $115 million during the week ending April 30, on the back of increasing external debt payments and higher current account deficit.
The gold rates in Pakistan are around Rs5,000 below the cost compared to the rate in the Dubai market.
