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Gold rises to new high of Rs34,114 per 10 grams: 20-Jun-10

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By Gohar Ali Khan

KARACHI: Gold prices climbed for the second straight day on Saturday to a new high of Rs34,114 per 10 grams after a sharp surge in the international prices, fuelled by sovereign debt worries and a weak euro, dealers said.

The precious metal prices touched their historic high, gaining Rs86 to Rs34,114 per 10 grams. In terms of per tola(11.664 grams), the increase was of Rs100 to Rs39,800.

“Economic crisis in eurozone, falling euro and problems of Iran have helped the yellow metal to rally to a new high,” said President All Sindh Sarraf and Jewellers Association Alhaj Haroon Rashid Chand.

Increasing rates for all commodities have discouraged people to buy gold that is viewed more as a universal currency and a safe investment. Growers used to buy gold after selling their crops, but due to the inflation they are living from hand to mouth these days, he said.

“And women, who used to love gold jewellery and gift it to each other, are now inclined to buy the artificial jewellery.”

“The government should abolish 1 per cent of withholding tax on 11.664 grams (per tola) and impose Rs50 of custom duty and Rs5 of income tax on the grams to curb volatility in bullion prices,” he said.

He said the neighbouring India has imposed Rs100 duty on 11.664 grams instead of the withholding tax. “Our gold imports have come to zero for years and exports have remained high as the metal has been undervalued at Rs500 against the dollar despite hitting the all-time high in the local market.”

Moreover, in the world market, spot gold hit an all-time high of $1,261.90

an ounce, but was bid at $1,256.65 an ounce at 3:20 p.m. EDT (1920 GMT), against $1,243.40 late on Thursday. US gold futures for August delivery also climbed to a record at $1,263.70, and settled up $9.60 at $1,258.30, its highest ever close.

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