Trade war pushes gold over Rs300,000/tola
KARACHI:
Gold prices continued their upward trajectory on Friday, surpassing the historic milestone of Rs300,000 per tola in Pakistan, driven by rising international market rates.
In the local market, the price increased by Rs1,346/tola, reaching Rs300,046 for the first time in history. Similarly, the price of 10-gram gold rose by Rs1,154, settling at Rs257,241, according to figures released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).
The surge in gold prices has been attributed to heightened safe-haven demand amid ongoing trade war concerns, especially ahead of the key US payrolls report. Commenting on the trend, Adnan Agar, Director at Interactive Commodities, stated, "Gold has reached an all-time high today and is expected to remain strong in the future."
This follows Tuesday's increase of Rs1,900, which took gold to Rs294,300, after Monday's Rs200 rise had already set a record of Rs292,400.
Globally, gold prices rose on Friday and were on track for a sixth consecutive week of gains as escalating trade tensions between the US and China prompted investors to seek refuge in the safe-haven asset. Spot gold gained 0.5% to $2,871.59 per ounce as of 1606 GMT, up more than 2% this week after hitting a record high of $2,886.62 earlier in the session. US gold futures rose 0.7% to $2,897.50.
US President Donald Trump kick-started a trade war this week as he imposed new duties on China, though he granted Mexico and Canada a one-month reprieve. Gold is often used as a safe investment during times of political and financial uncertainty.
The gold market also seems to have been buoyed by continued growth in the People's Bank of China's gold holdings and a new Chinese programme allowing insurance funds to invest in gold, said Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals.
A labour department report showed the US economy added 143,000 jobs in January, compared with the 170,000 expected by economists. The unemployment rate stood at 4%, compared with expectations of 4.1%.
Wage growth and declining job creation are challenging the Federal Reserve's ability to adjust rates, creating a complex yet potentially advantageous situation, said Bart Melek, Head of Commodity Strategies at TD Securities. A strong economy with full employment and easing inflation should allow the Fed to cut rates, but tariff uncertainties call for caution, Chicago Fed President Austan Goolsbee said.
Meanwhile, the Pakistani rupee saw a slight appreciation against the US dollar in the inter-bank market on Friday, gaining 0.04%. By market close, the currency stood at 279.05 per dollar, marking an increase of 10 paisa, according to data from the State Bank of Pakistan (SBP). The rupee had previously closed at 279.15 on Thursday.
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