KARACHI, Oct 7: The increase in world gold prices by $50 per ounce pushed the local rate up by Rs1,028 per 10 grams and Rs1,200 per tola on Tuesday.

The 10 gram gold price hit Rs22,242 as compared to Rs21,214 on Monday. Similarly, the one tola gold rate is now quoted at Rs25,950 as compared to Rs24,750.

President Karachi Sara and Jewellers Group Haji Rasheed Chand attributed the price increase to rising buying activities in the yellow metal by the investors after they had lost all hopes for gains in currency, stocks and property amid fears of further financial meltdown in Europe and America. Global gold price surged to $887 per ounce on Tuesday as compared to $837 per ounce on Monday.

He said that the gold had always been a safe haven or it can be termed as a natural currency that always pays under any political and economic crisis. “Even the investors of stocks and property in Pakistan are now active in lifting gold after uncertain future of the two main investing options,” he added.

He claimed that the gold was still cheaper by Rs400 per tola in Karachi as compared to Dubai.

Mr Chand said that the gold was also becoming costlier owing to falling strength of the rupee against the dollar. The rupee had lost its value by 22 per cent against the greenback since January till-to-date.

He was of the view that the people would start buying gold jewellery as the marriage season has got underway after Ramazan.

Saeed Mazhar Ali of Almas Gem and Jewellers said that the sale of gold jewellery sets had been slow after Ramazan owing to rising prices of gold. He said that the people were more concerned about the rising cost of living triggered by food inflation and rising utility charges.

Because of surging food prices, he said, many cash conscious people would again rely on buying low weight jewellery sets. Many of them would like to remould old jewellery sets into new ones. However, for many rich people in the country fluctuations in the bullion rates was a secondary issue, he added.

There were no official figures of gold sales and its annual consumption. However, figures compiled by the Federal Bureau of Statistics (FBS) revealed that gold imports during July-August, 2008 stood at 269 kg ($7.5 million) as compared to 277 kg ($5.14 million) in the same period of 2007.

In August, gold imports were 52 kg ($1.54 million) as compared to 216 kg ($6 million) in July 2008. In August 2007, a total of seven kg of gold valued at $125,000 was imported.