Gold soars to record high of Rs321,000 per tola

Owing to international factors, domestic gold rates have reached an all-time high, trading at Rs275,205 per 10 grams and Rs321,000 per tola.

According to data, the current rate of one tola of gold indicates a Rs3,200 rise from its previous value in a single day. Reports suggest that the sudden uptick in prices is linked to the imposition of additional tariffs by United States (US) President Donald Trump on imported goods.

Aside from Trump’s 25 percent tariff on imported vehicles, geo-political tensions have also been creeping up, causing the price of the commodity to surge by $31 in the international market with prices now resting close to $3,052 per ounce.

While rising gold prices spell great news for those with large quantities of the commodity, the same cannot be said for domestic gold traders. This is because local traders have witnessed a substantial fall in sales volume as the price of gold has surged beyond the general public’s reach.

The drop in affordability has caused local traders to worry as they believe a sizable volume of the commodity is still being exchanged but only because of independent speculators and investors. However, independent analysts believe that this might not be the case as there are significant issues that come with owning gold.

According to a senior official from a reputable investment company, investing in gold comes with problems linked to the verification, transfer and physical custody of the commodity. As such, analysts believe that a majority of Pakistanis have not fully embraced the gold wave and prefer to park their funds elsewhere – in more conventional areas such as real estate, mutual funds, banks and national savings schemes.

Moreover, the general public also has a tendency to lean towards purchasing foreign currency instead of gold to protect their savings as foreign currencies are a safe hedge against inflation and other uncertainties that arise because of macroeconomic instability.

Domestic prices are set by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), which also considers interbank rates. However, these rates have reportedly not changed much over the past year, implying that the brunt of the price change is mostly because of international factors.

As per the chairman of APSGJA, gold sales surge before Eidul Fitr; however, in the days leading up to Eid, sales have plummeted to a historic low.