KARACHI, July 8: The local gold price hit a new peak of the year on Tuesday as it was quoted at Rs21,214 as compared to Rs20,571 per 10 grams on Monday.

It was an increase of Rs643 in a single day session. One tola gold price was recorded at Rs24,750-24,800. Besides the impact of rising crude oil prices in world markets, the falling strength of rupee against dollar in the last two days made a double impact on local gold prices.

When international gold price hit a record peak of $1,024 per 10 ounce on March 17, the local gold price was quoted at Rs20,657 per 10 grams while the per tola rate surged to Rs24,100.

At that time, the rate of local currency to dollar ranged between Rs62 and Rs63.

Because of very high global rates and imposition of duties and taxes, import of gold during July-May 2007 to 2008 declined by 90 per cent in terms of value to 1,024kg ($23 million), from 24,141kg ($217.5 million) in the same period of last fiscal year, figures compiled by the Federal Bureau of Statistics (FBS) revealed.

All-Pakistan Gem and Jewellers Merchants Association President Saeed Mazhar Ali said that unannounced devaluation of rupee was responsible for pushing up local gold prices.

He said that investors were not currently active in the lifting of gold bars. They were even reluctant to invest in stocks owing to falling value of shares in view of political instability and law and order situation.

“Investors are now active in cashing in on their luck in dollar in anticipation of its further increase,” Saeed said.

He said that gold jewellery sale remained only 30 per cent after seven blasts in Karachi on Monday and people stayed away from markets on Tuesday.

All-Karachi Jewellers Group President Haji Haroon Rashid Chand claimed that the gold rate in Pakistan has been cheaper than in Dubai.

Without duty, the landed price comes to Rs25,255, and after adding one per cent withholding tax and 50 cent per tola duty, the price comes to Rs27,791 per tola.

He was of the view that investors had been active in lifting of gold, hoping for a further increase in local rates.

When asked as to how local gold demand was being met after a steep fall in imports, he said many people were now selling their gold bars which they had purchased at low rates a few years back. Besides, some people were also bringing their old jewellery sets for making new sets for their daughters’ weddings.

Reuters adds: Gold slid more than 1 per cent on Tuesday as oil prices shed more than $6 a barrel and as the dollar firmed after comments from Federal Reserve chairman Ben Bernanke.

Spot gold fell to $914.20/915.20 an ounce at 1505 GMT from $925.15/926.35 an ounce late in New York on Monday. Earlier it touched a session low of $912.50.