Gold prices in Pakistan reached a new record high on Saturday, following a recent spike in the country’s weekly inflation rate. The All Pakistan Sarafa Gems and Jewellers Association (APSGJA) reported that the price of 24-carat gold increased by PKR 500 per tola and PKR 429 per 10 grams, reaching PKR 225,500 and PKR 193,330, respectively.
It’s interesting that this increase in gold prices happened despite a $19 drop in the precious metal’s international price to $2,017 per ounce. Due to deteriorating economic fundamentals, currency depreciation, and historically high inflation rates, Pakistan’s gold market has experienced a steady upward trend. As a result, people frequently buy gold to hedge against inflation and a weakening currency.
The highest annual inflation rate in Asia in April was 36.4% in Pakistan, surpassing Sri Lanka’s rate of 35.3% from the previous month. In addition, for the seven days ending on May 4, weekly inflation rose to an unheard-of 48.35% year over year due to rising costs for chicken and wheat flour.
The Pakistani government and the International Monetary Fund (IMF) have been in impasse for months over negotiations for a crucial economic bailout. The currency market has been negatively impacted by the IMF program’s delay, which has increased demand for gold.
The APSGJA, in contrast, showed that silver prices had slightly decreased from their all-time highs. At PKR 2,870 and PKR 2,460.56, respectively, the price of silver decreased by PKR 80 per tola and PKR 68.58 per 10 grams.