KARACHI, May 22: Gold prices hit a new peak of the current year to Rs6,232 per 10 grams on Tuesday followed by suspension of gold imports in the wake of upward rally in gold prices in international markets.

In just two days, gold prices rose by Rs102 per 10 grams. The new price of 115,640 grams bar has touched Rs72,080, up by over Rs4,000 in the last one week.

On Wednesday international gold prices ranged between $319 and $320 grams per ounce. On May 13, it was priced at $311 per ounce. In middle of April, global gold prices were $304-305 per ounce.

International gold prices, which were already under pressure due to lingering Middle East tension, has further received a setback from the current heavy trade of firing between Pakistan and India.

Investors in world markets, who lost hopes on weakening dollar against key currencies, are now heavily piling up gold for safe haven purposes in case the India-Pakistan tension further picks up momentum and continued Middle East unrest.

“I think gold prices in world markets are expected to go beyond $325 per ounce if tension at Pak-India borders further heats up,” All Pakistan Gem Merchants and Jewellers Association (APGMJA) chairman Kamran Khan told Dawn on Wednesday.

The key players in the local markets — ARY, Pardesi and Tessori — had to suspend gold imports few days back after finding it unfeasible. These three key players usually import around 10,000 tola per day.

In the current situation at borders — a question arises whether Pakistani people are really on a hunt to stock gold bars, which is considered as a traditional safe haven asset in times of war and other severe crisis.

Investors and market players in Pakistan have already lost their hopes in dollar since it starts losing its strength after September 11 tragedy. The dollar lost its value by around seven per cent in the inter-bank market and 10 per cent in the open market against the rupee after September 11 incidents. In September gold was being sold at Rs5,465 per 10 grams in the local markets. Since then, gold prices had been skyrocketed by Rs767 per 10 grams.

Stock market has also lost its lustre as investors pulled out heavy investments from the bourse that can be judged by a decline of nearly 300 points in the Karachi Stock Exchange in the last four days.

Some investors had also ventured in the real estate in the last few months following sizable arrival of home remittance up to $1.865 billion in July-April 2001-2002 as compared to $922 million in the same period of previous fiscal. As a result, property prices in some key posh areas and upcoming areas like Gulistan-e-Jauhar have gone up by 10-30 per cent. The market analysts said people and even investors kept their hands off from the property markets in times of hovering war clouds.

“People even some investors have started buying gold bars and we continue to receive daily enquiries,” APGMJA chief said, adding that gold is the only option in times of uncertain situations.

Consultant of World Gold Council (WGC) for Pakistan, Syed Faisal Hashmi told Dawn that people are making retail investment in gold bars instead of dollar and stock markets since the tension between the nuclear armed neighbours have escalated in the last one week.

Some market analysts have different views. Head Research, Invest Cap and Securities, Mohammad Sohail, said in times of war — people usually prefer to maintain the local currency in hand so that they could purchase easily the daily kitchen items, whose prices usually go up when a war breaks out. “Gold may be their second option after stocking local currency. But definitely investment in real estate at this moment would be a sheer mistake,” he added.

At a time of rising domestic gold prices — genuine buyers of jewellery sets and other gold ornaments are bound to take a costly ride by paying more to meet the essential requirement of dowry following start of marriage season in Rabi-ul-Awwal. As a result of this, demand has picked up a little in the market.