Gold extended its rally towards a record high on Tuesday, amid rise in inflation and depreciation of the Pakistani rupee against the US dollar.

The upcoming federal budget and further tightening of monetary policy kept the price of the yellow metal near all-time highs.

According to the Sindh Sarafa (goldsmiths) Association, the price of gold jumped by Rs1,250 per tola and settled at Rs143,250 per tola. The price of gold increased by Rs 1,072 per 10-gram to close at Rs122,814.

Gold is considered a hedge against soaring inflation and is often used as a safe store of value during times of political and economic uncertainty.

In the international market, the price of yellow metal decreased to $1,854 per ounce.

Meanwhile, silver prices in the local market remained unchanged at Rs1,570 per tola and Rs1,346.02 per 10-gram on Tuesday.