(Bloomberg) -- Gold prices in Pakistan surged to a record as people took refuge in the safe-haven metal on mounting concerns that the nation’s economic conditions will deteriorate further.

“People are looking at banks not clearing payments and fearing the worst,” said Khurram Schehzad, chief executive officer at Karachi-based Alpha Beta Core Solutions Pvt. The price jump is the result of aggressive buying by investors as another safe bet — buying dollars — is not widely available due to economic woes, he said.

The world’s fifth-most populous nation is dealing with a range of economic challenges, including a dollar shortage and a delay in the International Monetary Fund’s loan program for the country. Moody’s Investors Service and Fitch Ratings downgraded Pakistan deeper into junk territory in October after devastating floods jeopardized its fiscal stability. 

Gold climbed to an all-time high of 164,500 rupees ($733) a tola, a local unit equivalent to about 12 grams, according to Adnan Qadri, chief executive officer at Qadri Gems & Jewellery in Karachi. The rally is more striking because the precious metal generally tracks global prices, which have come under pressure this year due to the US Federal Reserve’s aggressive tightening measures.

Gold demand in Pakistan jumped 34% to 13 tons between July and September from a year earlier, according to data from the World Gold Council. That was the most amount of gold purchased during a quarter in at least about three years.

--With assistance from Swansy Afonso.

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