Daily Times

Gold price surged for the second consecutive week to nearly two-month high on the back of Russia-Ukraine tension and inflation. Gold futures closed the week on a bullish note in the international market at $1,859 per ounce, with a massive $32.40 (+1.77 percent) gain only in the last session.

The price of 10 grams of 24-carat yellow metal in Pakistan, meanwhile, increased to Rs104,500. Local gold prices increased due to overnight change in the commodity price internationally when the local market was closed. Moreover, the Pakistani rupee depreciated marginally by around 0.13 percent (-23 paisas) against the US dollar during the week, which also impacted local prices negatively.

Geopolitical developments concerning the Ukraine-Russia conflicts amid the US, Israel and Western countries stirring up war hysteria by asking their citizens to leave Kyiv immediately, spurred gold demand. Moscow has repeatedly denied any plans to invade Ukraine and cited fears of “provocations” by Kyiv or other parties, despite massing more than 100,000 troops near the border.

On the other hand, inflation in the US climbed to its highest level in 40 years in January, with prices rising by 7.5pc from a year ago. The rise in the consumer price index (CPI) survey – which measures the costs of a wide variety of goods – has been the largest since February 1982. CPI rose 0.6pc from December, higher than expected but still down significantly from last October when inflation rose 0.9pc on a monthly basis.

The Federal Reserve has signalled that it intends to raise interest rates by 50bps at its meeting in March in an effort to dampen spending and bring down prices.