The price of gold once again increased sharply on the eve of New Year and was trading close to its all-time high on Monday.
The price of gold has increased by Rs700 per tola as international gold prices continue to surge and remain at their highest level in the last six months.
Last the week, gold prices saw a rather see-saw movement, decreasing by Rs1,000 per tola on Wednesday to trade at a two-week low of Rs66,000, before surging up again by as much the next day.
The trend seems to continue well into 2019 as a tola was trading at Rs67,900 on the last day of the year, according to data compiled by the All Sindh Saraf and Jewellers Association.
Pakistani traders adjust gold prices based on price movements in the international market and fluctuation in the dollar rates as well as market forces of demand and supply.
Gold prices hit their highest level of Rs68,000 per tola on December 20 before falling back in the next few trading sessions.
The prices compiled by the ASSJA come with a lag of a day after changes in international prices. Last week gold dipped slightly amid political uncertainty in the US market. However, it rallied again on Christmas as the dollar also fell — gold usually goes up when the dollar falls as investors move away from dollar-backed funds to gold and vice versa.
When looked at in the longer context, rupee depreciation, international price and local demand has been driving gold rates up. For example, gold prices increased by 10% in the last three months. The trend may hold for a while given the uncertainty around rupee-dollar exchange rates.
When this report went online, gold futures were trading at above $1,280 per ounce in the international market, their highest level in the last six months.