ISLAMABAD: Gold prices in Pakistan fell on Thursday from the historic highs reached earlier this week as the rupee recovered from record lows.
According to data released by the All Pakistan Sarafa Jewellers and Gems Association, the price of gold (24 carats) declined by PKR 500 per tola and PKR 429 per 10 grams to reach PKR 217,500 and PKR 186,471, respectively.
The fall in the gold’s value was in line with the Pakistani rupee’s upward movement, with the local currency appreciating PKR 1.71 or 0.6 percent to settle at PKR 284.91 per US dollar in the interbank market.
Gold reached an all-time high in the Pakistani market on Tuesday, with the price of gold (24 carats) jumping to PKR 218,300 per tola as the Pakistani rupee plunged and inflation remained at record levels.
People often prefer to buy gold as a hedge against inflation. Gold value also usually goes up in Ramadan due to increased demand.
The rise in weekly inflation by 0.92 percent week-on-week and 44.49 percent year-on-year during the seven-day period that ended on April 6, coupled with the surge in the prices of sugar and chicken due to Ramadan and likely hoarding, shifted investors’ attention towards the precious commodity.
Economic tensions continued to rise as the International Monetary Fund (IMF) reviewed external financing commitments from friendly countries before releasing bailout funds, causing a delay in the revival of the program and negatively impacting the currency market, which, in turn, bolstered demand for gold.
Gold price in international market
The All Pakistan Sarafa Jewellers and Gems Association also mentioned that the gold price is PKR 4,000 per tola “undercost” in Pakistan, compared to the Dubai market, showing that the Pakistani gold market is currently cheaper than the international market.
Meanwhile, prices of silver in the domestic market reached new highs of PKR 2,550 per tola and PKR 2,186.21 per 10 grams, while in the international market, gold prices gained $18 per ounce to settle at $2,027.
The recovery of the rupee has caused gold prices to fall, although the precious metal remains in high demand in Pakistan as a hedge against inflation and in anticipation of increased demand during Ramadan.
The price of gold in the Pakistani market is cheaper than in the global market, which may provide opportunities for investors.
