Gold price rally triggers rift in Pakistan’s bullion markets

KARACHI Gold prices in Karachi climbed by Rs6,400 per tola on Wednesday, driven by a rise in the global market and a depreciation of the local currency, but a rift on rates emerged among the different gold markets across the country.

The All Sindh Saraf Jewellers Association said the price of gold reached Rs206,500 per tola, or 11.66 grams, while the price of 10 grams of gold rose by RS5,487 to Rs177,040, tracking a $36 increase in the global gold price to $1,959 per ounce.

Silver prices also rose by Rs50 to Rs2,550 per tola, while 10 grams of silver gained Rs42.87 to Rs2,186.21. However, gold markets in Lahore, Peshawar and Quetta did not adhere to the rates set by Karachi, the country's largest and most influential bullion market, and announced higher prices for the yellow metal. Lahore and Peshawar quoted gold prices of around Rs216,000 and Rs213,000 per tola respectively on Wednesday, while Quetta reported a price of Rs212,000 per tola.

The discrepancy sparked a conflict among the jewellers' associations across the country, with the Karachi-based body accusing the others of violating an agreed formula for determining the bullion rates.

The formula was finalized after consultations with jeweller representatives from all over Pakistan, but some markets have been deviating from it for their own benefit, said Al-Haj Haroon Rasheed Chand, president of the Karachi Bullion Market and All Pakistan Gems and Jewellers Association.

Chand urged the authorities to intervene and ensure uniformity among all gold markets. He also announced that Karachi market would suspend its bullion rates for a week in protest against the non-compliance of other markets.

Gold prices in Pakistan are influenced by a number of factors, including the international gold price, the exchange rate of the rupee against the U.S. dollar, and the demand and supply of the precious metal in the local market.

Gold is often seen as a safe-haven asset that investors flock to during times of economic uncertainty or market volatility. The recent surge in gold prices reflects the ongoing impact of global geopolitical and economic conditions on the precious metal.

The movement of gold prices is closely watched by financial markets, as it can serve as an indicator of inflation, currency strength and broader economic conditions.