Gold prices in Pakistan saw a significant drop on Tuesday, halting a three-day streak of gains. The price per tola decreased by Rs1,900, settling at Rs248,500, while the price per 10 grams fell by Rs1,630 to Rs213,048, according to the All Pakistan Sarafa Gems and Jewellers Association.
On April 20, 2024, the per-tola gold price reached an all-time high of Rs 252,200. Over the week ending May 18, 2024, gold had gained Rs 7,500 per tola.
The association noted that gold prices in Pakistan are currently Rs4,000 per tola lower than international prices, indicating a cheaper domestic market.
Gold is often seen as a hedge against inflation. However, recent stronger-than-expected inflation data, which hit its lowest level since May 2022, reduced the likelihood of a rate cut, impacting gold prices. Additionally, a steady monetary policy has dampened investor enthusiasm.
Internationally, gold prices also fell, dropping by $21 per ounce to settle at $2,418. Earlier, on April 12, gold prices had reached a record high of $2,431.29 per ounce.
Interestingly, while gold prices dropped, silver prices in the local market increased by Rs120 per tola and Rs102.88 per 10 grams, settling at Rs2,850 and Rs2,443.41, respectively.
Gold prices in Pakistan are set by the All Pakistan Sarafa Gems and Jewellers Association, which determines local market prices six days a week, from Monday to Saturday.
Pakistan does not produce gold locally and meets its demand through imports, making the domestic gold rate dependent on international market prices, the rupee-dollar exchange rate, and local supply and demand.
Recent political and economic instability, coupled with high inflation, has caused volatility in gold prices. In uncertain times, people often turn to gold as a safe investment and a hedge against inflation.
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