Gold has surged to an all-time high in Pakistan as mounting tensions between the United States and Iran spurred geopolitical uncertainty and demand for safe-haven assets.
Local one-tola and 10g gold prices have hit Rs. 93,400 and Rs. 80,075, respectively.
This breaches the previous peak of Rs. 90,800 and Rs. 77,289 achieved last week. There was a massive increase in gold prices in the country as one-tola recorded a massive gain of Rs. 2,600 during the day and 10g gold price witnessed an increase of Rs. 2,230 on Monday.
All Sindh Sarafa Jewellers Association’s (ASSJA) President Haji Haroon Rasheed Chand claimes that the latest increase in the gold price is due to rising tensions between the US and Iran.
Talking to Propakistani, Chand stated that the buying activities of pure gold and jewelry have gone down massively in Karachi and different cities of the country. He claimed that the gold prices are putting up extra pressure on already distressed people who want to buy jewelry sets for weddings.
He further said that the prices may stay at this level for one week, adding that the rupee-dollar parity has been stable and the said price was adjusted due to a massive jump in international prices.
Gold surged close to a seven-year high on Monday, as investors flocked to the safe-haven metal on escalating U.S.-Iran tensions.
Spot gold rose 1.7% to stand at $1,577.98 per ounce. Earlier in the session, it had rallied as much as 1.8% to touch $1,579.72, its highest since April 10, 2013. While U.S. gold futures gained 1.8% to $1,580.30.
“The geopolitics is taking center-stage,” said market experts.
The Iran-U.S. tensions have escalated to a boiling point, that’s what has been pushing gold prices up.
President Donald Trump threatened sanctions against Iraq on Sunday after Baghdad demanded that American and foreign troops leave, amid a growing backlash over the U.S. killing of a top Iranian military commander, heightening fears of a wider conflict.
The market’s risk-averse sentiment underpinned the bullion, which is often seen as an alternative investment during times of political and financial uncertainty. “If it (gold) breaks the key resistance level of $1,585, it will lead to the key psychological level of $1,600,” said the experts.