KARACHI: Local gold prices have soared to a record Rs118,700 per tola and Rs101,766 per 10-gram, as the precious metal crossed $1,900 per ounce barrier internationally.
Friday’s rates showed a jump of Rs1,400 and Rs1,200 from Thursday. The All Sindh Saraf Jewellers Association noted that the $14 per ounce rise in world gold price pushed up rates locally.
On Jan 1, one tola, 10-grams and international per ounce gold prices were Rs88,150, Rs75,574 and $1,518, respectively.
Reuters adds: Safe haven gold pierced the $1,900 per ounce ceiling on Friday for the first time since 2011 as a worsening US-China row added to fears over the hit to a global economy already reeling from the coronavirus pandemic.
Yellow metal in international market crosses $1,900/oz
Spot gold climbed 0.9 per cent to $1,902.99 per ounce by 10:47 am ET (1447 GMT), having earlier hit its highest since September 2011 at $$1,905.99.
US gold futures rose 0.6pc to $1,901.00 per ounce.
“Concerns about more global economic slowing due to the increasingly acerbic US-China spat is seen as likely to keep global government and monetary support going even longer,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
In yet another escalation, China ordered the United States to close its consulate in the city of Chengdu, responding to a US demand for China to close its Houston consulate.
This hammered risk sentiment and sent the dollar index to a two-year trough.
Further bolstering bullion’s appeal was the constant surge in Covid-19 cases, with the US tally crossing over 4 million on Thursday and global cases breaching 15.58m.
If the economy does not show “quality signs” of improving, gold could clear $1,922 and continue towards $2,000, said independent analyst Ross Norman.
Non-yielding gold has surged 24pc this year, underpinned by low interest rates and stimulus from central banks, which benefits bullion since it is a perceived hedge against inflation and currency debasement.
However, Commerzbank analysts said the rise in gold and silver had happened “possibly too quickly,” adding in a note that this entailed “the risk of a setback, especially as gold and silver are being driven almost exclusively by extremely strong investment demand”.
Silver rose 0.3pc to $22.79 per ounce, and was up over 18pc for the week, its best since 1987, bolstered by hopes for a revival in industrial activity.
Platinum rose 2pc to $923.34 and palladium climbed 3.7pc to $2,205.49.
Published in Dawn, July 25th, 2020
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