Gold prices rise to historic highs
The prices of gold in the country have touched record high on Monday beating the previous record it broke on Saturday after a $46 per ounce jump in the international prices.
The yellow metal has become an investor favorite ever since the pandemic rocked other asset classes which have seen unstable returns during the last two quarters.
In the local market, per tola gold prices increased by Rs5,100 to Rs123,800 — highest ever in the country. Meanwhile, the price of 10-gram gold in the local market jumped by Rs4,372 to Rs106,138.
Recently on July 24 — three days ago — the 10-gram gold prices in the country crossed the Rs100,000 mark touching a new peak.
Consistent increases in the gold prices come at a time when the demand from consumers has hit new lows since the wedding gatherings have shortened and marriage halls have been shut down.
Moreover, jewellery associations in the country have also said the demand from consumers is record low however increase from investors in the local and international markets have pushed up the prices of yellow metal. They also said that the local prices are still at a discount when compared to the middle east and south Asian region.
Gold is usually considered as the safest investment among all asset classes. Usually, as has been seen in the past, investors flock to purchase gold whenever the global economic outlook gets bleak and investors are looking to park their funds in safe haven investment options.
Last time, in 2010 — after the global economic crisis of 2007-8, the gold had peaked to new highs as investors rushed to purchase gold to hedge their losses against other investments.
However, back-to-back increases are unlikely to last as the market urgently needs an imminent correction as the rally cannot last forever. In addition, any positive news on the development vaccine should also dam the rising prices of the gold.