Gold Shines Again as Record Inflation Boosts Demand

Gold Shines Again as Record Inflation Boosts Demand
Gold Shines Again as Record Inflation Boosts Demand
A representative image of gold bracelets. — Reuters/File
  • The price of gold stands at Rs141,000 per tola.
  • A rise of over 1.43% per tola ended a four-day streak of gold losses.
  • Silver prices fall by Rs50 per tola.

KARACHI: Gold prices rose on Thursday as soaring inflation blunted risk appetite and boosted demand for the safe-haven metal, although the Pakistani rupee’s advance limited expectations. bullion gains.

Data released by All Sindh Sarafa Association showed that the price of gold in Pakistan jumped by Rs 2,000 per tola and Rs 1,715 per 10 grams to stand at Rs 141,000 and Rs 120,885.

A rise of more than 1.43% per tola ended the yellow metal’s four-day losing streak during which the price of gold fell by 8,100 rupees in the local market.

Pakistan’s record inflation based on the consumer price index hit a multi-decade high of 27.3% in August, pushing the price of gold to a 1.5-year high.

The safe-haven asset reversed its downtrend today as multi-year high inflation data added to the asset’s appeal; however, the appreciation of the Pakistani rupee was pulling the gold market and limiting its rise.

Gold is traditionally seen as a hedge against inflation. However, the reduction in central bank interest rate hikes tends to drive up government bond yields, translating into a higher opportunity cost for holding gold that pays no interest. .

Gold is considered a hedge against inflation, but interest rate hikes would increase the opportunity cost of holding non-performing bullion.

On the international market, the price of the yellow metal plunged $13 an ounce to settle at $1,702. Gold prices briefly slipped below the key psychological level of $1,700 for the first time in six weeks as major central banks stuck to an aggressive stance to fight inflation, dampening demand non-performing ingots.

It should be noted that the price of gold is below cost and is cheaper by 3,000 rupees per tola compared to Dubai.

Meanwhile, domestic silver prices fell by Rs 50 per tola and Rs 42.87 per 10 grams to stand at Rs 1,470 per tola and Rs 1,260.28 per 10 grams today. today.

. Gold shines new so inflation record boosts demand

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