Gold rates plunge as market reopens after a month

KARACHI: The gold market reopened on Tuesday after a month-long suspension, with bullion rates dropping sharply by Rs15,500 per tola ($90.5) amid a crackdown on speculators and a stronger rupee.

The traders had stopped issuing gold rates in mid-September after an unusual and unreasonable spike in prices triggered a law-enforcement action against market manipulators.

The All Pakistan Gems and Jewellers Association said the gold rate fell from Rs215,000 per tola to Rs199,500 per tola during the suspension period. The price of 10 grams of gold also declined by Rs13,546 to Rs171,039.

In the international market, gold prices also fell by $55 to $1,856 per ounce. Silver prices followed suit, dropping by 50 rupees per tola and 42.87 rupees per 10 grams. The current rates stand at 2,500 rupees per tola and 2,143.34 rupees per 10 grams.

Traders said the main factor behind the sharp decline in gold prices was the continuous appreciation of the rupee against the U.S. dollar. The local currency gained more than 5 percent against the greenback in the past month, putting downward pressure on the prices of gold and other precious metals. The reopening of the gold market was welcomed by traders and investors, who had been left in a state of uncertainty and confusion by the previous closure of rates.

The stability of the gold market is of significant importance for Pakistan, as it affects not only traders and investors but also consumers and the overall economic landscape. The reopening of bullion rates is expected to bring some relief to the market participants, who have been eagerly waiting for clarity on the pricing of gold. The previous closure of rates had left many investors and traders in a state of uncertainty, with speculation rife about the potential causes behind the abrupt rate hike in September. Market analysts and experts are now closely monitoring the performance of gold and silver in the local and international markets to assess the impact of these changing rates on the broader economy. The reopening of bullion rates provides an opportunity for jewellers, investors, and consumers to recalibrate their strategies and make informed decisions based on the current pricing dynamics.

It remains to be seen whether the current trend of declining rates will persist or if future market developments, both domestically and internationally, will influence the pricing of these precious metals. Traders said the gold market's stability is of significant importance, not only for traders and investors but also for the overall economic landscape of Pakistan. As such, market participants will continue to closely watch for any developments that may impact gold and silver rates in the coming weeks.