KARACHI: Gold continued to shine brighter as per tola and 10-gram prices reached an all time high of Rs123,800 and Rs106,138 on Monday, up Rs5,100 and Rs4,372 from Saturday’s rates.

A jump of $46 per ounce in international gold rates to $1,942, well above its previous record of $1,921.18 in 2011, was the main reason for this sharp increase in local bullion prices.

All Sindh Saraf and Jewellers Association President Haji Haroon Rasheed Chand said, “The increase of Rs5,100 per tola and Rs4,373 per 10-gram has so far been the highest gains in a single day for gold.”

He said one tola and 10-gram rates surged by Rs35,650 and Rs30,464, respectively, from January’s Rs88,150 and Rs75,574. Taking the world gold rate of $1,518 in January, the price has swelled by $424 per ounce in last six months.

According to BIPL Securities, gold touched record prices as worries over issues such as the coronavirus pandemic as well as US-China tensions weighed on investor sentiment. In the morning of Asian trading hours on Monday, spot gold traded at about $1,931.11 per ounce after earlier trading as high as $1,943.9275 per ounce. Those levels eclipsed the previous record high price set in September 2011.

Chairman All Pakistan Jewellers Manufacturers Association Moha­mmad Arshad said, “Jewellery trade, which had already been on the decline due to ban on wedding ceremonies, would further get depressed due to smart lock down imposed in Punjab till August 5 to control coronavirus.”

He said jewellers from Karachi used to feed some 30 per cent jewellery sets to Punjab.

Arshad said a number of people are coming to sell their old jewellery sets in view of fetching higher prices amid rising gold rates. “This is a really tough time for many people to buy gold jewellery sets and other ornaments for weddings in their families,” he added.

AFP adds: In London gold soared to a record high on Monday as investors rushed into the safe-haven commodity on concerns about heightened China-US tensions, spiking virus infections and a lack of progress on a new stimulus bill in Washington.

“Always a sign of trouble, gold continued its red hot streak on Monday, the safe haven commodity looking mighty attractive after another troubling weekend of Covid-19 and US-China headlines,” said Spreadex analyst Connor Campbell.

Dollar weakness was a big factor behind gold’s takeoff, analysts said, after vast monetary easing by the US Federal Reserve undermined confidence in the greenback without reassuring investors about the outlook for any fast US recovery.

Eyes are on the Fed’s policy meeting this week, with some predicting further measures to boost the economy — possibly even the use of negative interest rates — that could put more pressure on the dollar and send gold above $2,000.

As gold rose, stock markets — a riskier investment — wobbled with investors fretting over the impact of the virus on the economy.

Published in Dawn, July 28th, 2020