Gold prices in Pakistan saw a significant rise after a turbulent week marked by substantial declines. This recent upward trend in the domestic gold market aligns with the global increase in the value of the yellow metal.
According to data from the All Pakistan Sarafa Gems and Jewellers Association, the price of gold in Pakistan increased by Rs2,500 per tola and Rs2,143 per 10 grams, reaching Rs240,500 and Rs206,190, respectively.
Last week, both local and international gold prices experienced a decline as investors sought refuge in gold amid escalating geopolitical tensions, considering it a safe haven. However, negative indicators halted this winning streak, resulting in market losses.
Since reaching an all-time high of Rs252,200 per tola on April 20, 2024, the price of gold per tola in Pakistan has seen a sharp decline, totaling Rs6,400 per tola over the past week.
The association also noted that the price of gold in Pakistan is Rs2,000 per tola lower than the international market, indicating that the Pakistani gold market is currently more affordable than the global market.
Gold, often seen as a hedge against inflation, experienced losses in the local market following unexpectedly low inflation data, which reached its lowest level since May 2022, reducing expectations of a rate cut. Additionally, a stable monetary policy dampened investor sentiment.
Similarly, international bullion prices increased, with the price per ounce rising by $21 to $2,322. Bullion prices in the international market hit a record high of $2,431.29 on April 12.
Meanwhile, silver prices in the local market remained unchanged at Rs2,620 per tola and Rs2,246.22 per 10 grams, respectively.
The gold price in Pakistan is determined by the association, which sets prices six days a week from Monday to Saturday. Pakistan, being a small gold market globally, meets its demand through imports as it does not produce gold domestically.
Therefore, the gold rate in Pakistan is determined based on its prices in world markets, the rupee-dollar exchange rate, and demand and supply in domestic markets. The latest local market prices are determined considering the prices at which transactions occur between buyers and sellers.
Gold prices in Pakistan have been volatile recently due to ongoing political and economic uncertainty and high inflation. In such times, people tend to prefer buying gold as a safe investment and hedge.