Gold soars to record high amid political turmoil in Pakistan

May 10, 2023 (MLN): Domestic bullion witnessed an exceptional Wednesday, with 24-karat gold reaching Rs240,000 per tola, registering a remarkable growth of Rs9,900.

Following the arrest of PTI Chairman Imran Khan, the political landscape of Pakistan has turned into a mess which has made investors run to safe-haven assets amidst market-wide panic.

Although the political chaos pushed the Pakistani rupee (PKR) towards the bottomless pit, with the local unit closing down by 1.89%, and at the same time international spot gold going up by 0.21% today.

That still does not make up for the huge 4% (Rs9,900) surge in the domestic gold price.

According to the Karachi Sarafa Association, the price of 10-gram 24-karat gold reached Rs205,761, up by Rs8,487. While 10-gram 22-karat gold closed the day at Rs188,615.

Similarly, the price of silver also surged in the domestic market, with 24-karat silver increasing by a significant Rs100, to close at Rs3,100 per tola, and 10-gram 24-karat silver gaining Rs85.72 to close at Rs2,657.7 per tola.

Both domestic gold and silver rates are currently at their highest ever in Pakistan.

On the other, soft U.S. consumer price index (CPI) data led to a sharp uptick followed by a 0.4% decline in international spot gold within an hour of data release.

As gold is usually considered a safe-haven asset to protect against inflation, softer inflation data incentives investors to risk on assets rather than gold.

Meanwhile, international spot silver is currently trading at $25.75, up by 0.52%.

Copyright Mettis Link News