Gold’s price per tola jumped Rs1,250 in two days, according to the All Sindh Sarrafa Jewelers Association. It is now valued at Rs107,250.
The price in the international market went to $1,870 an ounce by the time this story was filed. Just last week on May 12, gold was $1,815 per ounce.
A. A. Gold Commodities Director Operations Adnan Agar said that the increase in inflation in the US and the recent bitcoin correction pushed gold up. “These two were the major developments during last week,” he said.
The maverick cryptocurrency lost nearly $15,000 in value just last week as it fell from $58,000 on May 11 to as low as $43,000. It slightly recovered to $45,000 by the time this story was filed.
Adnan Agar added that the inflation was artificial and not due to an increase in economic activities as normally happens.
“The inflation is due an injection of the stimulus packages worth $9 trillion given in the aftermath of the pandemic especially in the US.”
The stimulus packages weakened the dollar, which was also why gold went up.
The prices of gold and other precious metals go up during uncertain times such as wars and disasters as they are considered safe havens for investment. Their prices fall when stable times are expected ahead. Investors turn to gold when things don’t look in favour of an economy and stocks. The same happened when Covid-19 started to spread globally.
Agar said the price may go up to $1,890 per ounce in the international market before taking a correction. When the price of a commodity or a stock goes up, investors begin to sell to make a profit. In the process, the price comes down, which is known as a correction.
But on the other hand, when the economy starts improving, investors move to the capital market from gold and other metals. The situation in the US, the biggest economy of the world, plays an important role in influencing gold prices globally.
The price of gold started going up internationally as countries across the world went into lockdowns in March 2020. It rose from $1,471 to reach an all-time high of $2,063 an ounce by August 6. The per tola price in Pakistan peaked at Rs132,000 at that time.
