KARACHI: Gold in Pakistan continued to race towards record-high levels as the price jumped by nearly 2% on Monday due to the economic uncertainties brewing as a result of the devastations caused by the catastrophic flash floods.

Data released by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of gold has jumped by Rs3,000 per tola and Rs2,572 per 10 grams to Rs156,000 and Rs133,745 in Pakistan on Monday.

Cumulatively, the price of yellow metal surged by Rs7,300 per tola during the week ended September 10.

The association determines local prices based on rupee-dollar parity at the open market — as the association members finance gold imports by buying dollars from the open market — and international rates.

In Pakistan, it seems that the larger the depreciation in the rupee at domestic “open markets” — compared to the interbank markets — the higher the price of gold.

It should be noted that the rupee has depreciated by over 10% in the current fiscal year 2023 (July 1, 2022 to date) to Rs229.82 against the US dollar at the interbank market. In the previous fiscal year (FY22), it dropped by 30% to Rs205.

Pakistan meets its domestic demand for gold through imports, as it does not produce the metal locally. At present, however, the country is importing a very small volume of bullion since the government has imposed tight conditions on imports to save foreign exchange reserves.

In the international market, the price of yellow metal rose by $15 per ounce to settle at $1,732.

Gold rates in Pakistan are around Rs4,000 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market gained Rs30 per tola and Rs25.72 per 10 grams to settle at Rs1,570 per tola and Rs1,346.02 per 10 grams.