International price also decreases amid continued uncertainty
The price of gold fell in Pakistan Thursday in line with the decline in the yellow metal's value in the international market.
The price of gold (24 carats) decreased by Rs1,800 per tola and Rs1,543 per 10 grams to settle at Rs236,000 and Rs202,332, respectively, data provided by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed.
Separately, the international rate went down $21 to reach $1,961 per ounce.
International investors have been on edge as uncertainty remains over whether US Democrats and Republicans will be able to reach an 11th-hour agreement on raising the federal debt ceiling.
If the debt ceiling — which is currently capped at $31.4 trillion — is not raised, it would trigger the first-ever US default.
Gold's value also declined internationally after Federal Reserve officials "generally agreed" that the need for more interest rate increases "had become less certain", Reuters reported.
Gold, a non-yielding asset, tends to lose appeal in a high-interest-rate environment.
The gold rate has been volatile in the domestic market due to a number of factors, including economic and political turmoil, high inflation, and currency depreciation. People prefer to buy the yellow metal in such times as a safe investment and a hedge.
The rupee, which fell to an all-time low of Rs298.93 on May 11, closed at Rs285.74 per US dollar in the interbank market Thursday. It gained Rs1.39 or 0.49% against the US dollar, according to State Bank of Pakistan data.
The jewellers' body also said that local gold was "overcost" by Rs5,000 per tola in Pakistan compared to the Dubai bullion market. This means that, at present, the Pakistani gold market is more expensive than the world market.
Data shared by the association showed the price of silver remained unchanged at Rs2,900 per tola and Rs2,486.28 per 10 grams, respectively.