May 04, 2024
Per tola gold price in Pakistan dropped more than 2% during the week ending on Saturday (May 4) as worries over geopolitical tensions in the wake of Iran and Israel war subsided along with low inflation numbers which prompted investors to scale back safe-haven trades in favour of riskier assets like equities.
The data released by All Pakistan Sarafa Gems and Jewellers Association showed that the price of gold decreased by Rs1,600 per tola and Rs1,257 per 10 grams to settle at Rs238,000 and Rs204,047, respectively.
It should be noted that the gold price was on a rising spree last week in the local and international market as investors were taking refuge in the precious metal — considered a safe haven — due to escalation in geopolitical tensions; however, negative cues snapped the winning streak and forced the market to register losses.
Gold price in Pakistan has shed Rs14,200 per tola since it touched an all-time high of Rs252,200 per tola on Saturday (April 20, 2024). Cumulatively, during the week gold shed Rs6,400 per tola (or 2.6%).
The association also mentioned that the price of gold is Rs2,000 per tola “undercost” in Pakistan, as compared to international market, showing that the Pakistani gold market was currently cheaper than the global.
Gold — which is considered a hedge against inflation — registered losses in the local market after a stronger-than-expected inflation data — which fell to its lowest level since May 2022 — softened expectations of a rate cut. Moreover, steady monetary policy sapped investors’ spirit.
Contrary to the local market gold price registered gains in the international market as per ounce bullion price gained $4 to settle at $2,301.
Bullion price in the international market touched a record high of $2,431.29 on April 12.
Meanwhile, silver price in the local market remained unchanged at Rs2,620 per tola and Rs2,246.22 per 10 grams, respectively.
Gold price in Pakistan is announced by the association, which determines gold prices in Pakistan for local markets six days a week from Monday to Saturday.
Pakistan is a small market for gold at the global level. It meets the commodity’s demand through imports as it does not produce the precious metal locally.
Accordingly, the gold rate in Pakistan is determined by keeping in view its prices in world markets, rupee-dollar exchange rate, and demand and supply in domestic markets. The latest price for local markets was determined to keep in view the prices at which trade took place among buyers and sellers.
Gold price in Pakistan has been volatile in Pakistan recently amid continued political and economic uncertainty and high inflation. People prefer to buy this precious commodity in such times as a safe investment and a hedge.
