The price of gold in Pakistan reached yet another high on Tuesday as economic instability and record inflation continue to plague the country. The All Pakistan Sarafa Gems and Jewellers Association (APSGJA) reported that the rate of gold (24 carats) increased by Rs1,500 per tola and Rs1,286 per 10 grams, reaching Rs221,000 and Rs189,472, respectively.
The demand for gold in the country has been on a steady rise as economic fundamentals weakened and inflation soared to record highs. As people prefer to buy the precious metal during such times to protect themselves against inflation and currency depreciation, the price of gold has been increasing steadily.
The rupee has depreciated significantly, hitting an all-time low of Rs288.43 against the US dollar in the interbank market on April 11. Although it has recovered somewhat since then, the US dollar continues to trade above Rs280. The rupee lost Re0.08 or 0.03% against the greenback on Tuesday to close at Rs283.92 in the interbank market.
In April, inflation reached 36.4% year-on-year, which is a record high, making Pakistan the country with the fastest rising prices in Asia, even surpassing Sri Lanka, where inflation was measured at 35.3% in the previous month.
The delay in an agreement with the International Monetary Fund (IMF) for an urgently needed economic bailout has also contributed to increased demand for gold. Without such a bailout, Pakistan risks default, and the delay in the revival of the IMF programme negatively impacts the currency market.
Meanwhile, the price of gold remained unchanged at $1,990 per ounce in the international market. The APSGJA also reported that the price of silver rose to a record high, with an increase of Rs130 per tola and Rs111.45 per 10 grams to settle at Rs2,730 and Rs2,340.53, respectively.
