KARACHI: Gold prices in Pakistan dropped by Rs5,400 per tola on Thursday, following the recovery of the Pakistani Rupee against the US dollar, industry officials said.According to data from the All Sindh Saraf Jewellers Association, gold rates in the local market decreased to Rs229,000 per tola. Similarly, the price of 10 grams of gold also declined by Rs4,629, reaching Rs196,331.
In contrast, gold rates in the international market saw a slight increase of $7, reaching $1,967 per ounce. On the other hand, silver rates in the local market dropped by Rs50, settling at Rs2,750 per tola. The price of 10 grams of silver also experienced a decline of Rs4,286 reaching Rs 2,357.68. It is worth noting that Pakistan's gold and silver prices reached an all-time high on May 10, with gold prices soaring to Rs240,000 per tola and international gold prices trading at $2,031 per ounce. Silver rates in the country had reached Rs3,100 per tola.
Explaining the sudden decline in gold prices, one analyst attributed it to the record appreciation of the rupee against the dollar. Rupee witnessed a significant appreciation against the US dollar in the open-market on Thursday. The dollar was quoted in the range of 295-300 in the open-market, as compared to 311-314 a day ago.
Muhammad Shafi Khan, a senior goldsmith in the city, supported this claim, stating that the appreciation of the rupee was the main reason behind the drop in gold prices. Despite the decrease in prices, Khan noted a significant demand for raw gold in the country. He observed that even individual investors were shifting their investments from real estate to gold, as the dollar supply was limited and gold was still considered a safe haven.However, Khan expressed concerns about the panic in the market due to the rapid rise in gold prices and the scarcity of gold in the open market, where it has been hoarded. He mentioned that while the local market rates are usually higher than the international market, the gap has now narrowed due to the decline in the international market and the appreciation of the rupee.
Nonetheless, jewellers and employees continue to face pressure due to the rising price of gold, and the majority of people's purchasing power has decreased. Khan warned that if the economy does not remain stable and the dollar rates increase again, gold prices may rise once more.Given the current economic and political crises, investors are shifting their focus to raw gold in the form of bars and biscuits, as jewellery sales remain low and workers face increasing pressure.