Gold price drops in Pakistan by more than Rs2,000 per tola

Gold rate Thursday dropped by more than Rs2,000 in Pakistan a day after reaching an all-time high, with market experts terming the fluctuations in the international market as the reason behind today’s fall.

The rate of gold (24 carats) decreased by Rs2,700 per tola and Rs2,314 per 10 grams to reach Rs237,300 and Rs203,447, respectively, according to data provided by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA).

AA Commodities Director Adnan Agar told Thenews.com.pk that although the rate in the international market had increased, the price of the yellow metal witnessed a drop as there were jitters in the market due to the uncertainty surrounding the US debt ceiling.

The drop in gold prices was witnessed as the dollar advanced, while markets assessed US inflation data to gauge the Federal Reserve’s next policy move.

“Near-term debt ceiling talks and US macro data will influence the gold price. Longer term, it could still go higher driven by a weaker dollar and lower real rates,” UBS analyst Giovanni Staunovo said.

In the international market, the rate of gold stood at $2,038 per ounce after an increase of $7.

The precious metal's price rose to Rs240,000 per tola Wednesday after it saw a massive increase of Rs9,900 due to the ongoing political turmoil that came after Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan's arrest.

With the economy already in dire straits, people prefer to buy yellow metal to protect themselves against inflation and currency depreciation.

The weekly inflation hit an all-time high of 48.35% year-on-year (YoY) with prices of chicken and wheat flour increasing during the seven-day period ending May 4.

Meanwhile, it seems that Pakistan may not get a crucial tranche from the International Monetary Fund (IMF) anytime soon, as the country’s loan programme is not on the agenda of the lender’s Executive Board till May 17.

The delay in the revival of the IMF programme negatively impacts the currency market which, in turn, bolsters the demand for gold.

Data shared by the association showed that the sliver rates stood unchanged at Rs3,100 per tola and Rs2,657.7 per 10 grams.