KARACHI: Gold hit a record high on Tuesday in local and international markets as investors were afraid about the threat to global economy from European and US debt crises.Price of gold increased by Rs 2,150 per tola in a single day on Tuesday to reach at Rs 57,000 per tola, whereas its international price increased by $63 per ounce to reach $1778 per ounce mark, the metal experts said.Investors have lost confidence in the bourses across the major stocks exchanges, besides the debt crisis reported to have engulfed eurozone’s third-and fourth-largest economies, Italy and Spain.
Spot gold prices retreated from highs as stock markets opened higher in the United States, however, they remained up 1.4 percent on the day at $1,739.60 an ounce, having earlier peaked at $1,778.29.Gold has risen by about 7.0 percent this month, driven by flows of cash out of equities, bonds and currencies, after the United States lost its top-notch credit rating.The higher buying by China, India and some European countries pushed the yellow metal prices on peak.
They said the gold being the safest haven for investment remained in focus besides its high returns on investment and hedging.A metal expert in London, Saleem Ahmad said the gold market sustained its upward journey in 2011 on back of poor returns on stocks and crumbling economies of US and major European countries.Heavy buying by India and China besides international debt issues is one of the most important motives for heavy investment of money in gold, he added.
Over the last one year, gold prices in India have risen by 34 percent, in Pakistan 47 percent and this has been attributed to the poor outlook for the global economy, the rising inflationary pressure and the weakness of the US dollar against other major currencies.Ahmad said fresh highs in gold would keep even pace with an initial target seen at $2,000 per ounce on international demand.Hedging in gold is still on the higher side as it touched a new high around 76 percent in six months of 2011. – Dailytimes