Gold prices hit record high, reach Rs96,300 per tola in Pakistan
Statesman Report
KARACHI: Gold prices climbed more than 2 percent on Monday to their highest since February 2013, as spikes in coronavirus cases in several countries outside China deepened worries about a hit to the global economic growth, prompting a flight to safe havens.
In Pakistan, local bullion price of one tola gold on Monday rose to all-time high of Rs96,300, showing a sharp jump of Rs2,000.
This is the fourth time this year that domestic gold prices have broken previous records on the back of soaring international prices.
Experts have opined that the country’s gold sector has been attracting investment.
Spot gold was up 1.6 percent at $1,669.80 per ounce by 0713 GMT, after climbing to $1,678.58 earlier in the session. U.S. gold futures rose 1.5pc to $1,672.80.
“The thinking is that fewer people are holding shares, selling down in particular, and that money has to fall into havens,” said Michael McCarthy, chief market strategist at CMC Market.
“The impact on the global economy also means we will likely see a lower interest rate environment for longer.”
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Global equities extended losses as concerns about the spread of the virus beyond China grew with sharp rises in infections in Italy and Iran, while South Korea raised its infectious disease alert to its highest level.
The World Health Organization (WHO) said it is worried about the growing number of cases without any clear link to China.
“Gold has finally established some serious momentum, and more negative coronavirus headlines will see a test of $1,700 an ounce on (safe-)haven flows, sooner rather than later,” Jeffrey Halley, senior market analyst at OANDA, said in a note.
Among other safe havens, the U.S. dollar edged higher, while the benchmark U.S. 10-year Treasury yield fell to its lowest since July 2016.
The Japanese yen further backed away from its lowest since April 2019 against the U.S. currency.
Apart from speculative positioning, financial uncertainty and low interest rates are also bolstering demand for gold, Phillip Futures analysts said in a note.
Speculators raised their bullish positions on COMEX gold and silver contracts in the week to Feb. 18, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Among other precious metals, palladium was flat at $2,703.31 per ounce. Silver rose 1.4% to $18.71 an ounce, while platinum fell 0.4% to $969.41.