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Thursday December 12, 2024

Gold prices drop by Rs5,400 per tola following US elections

By Shahid Shah
November 08, 2024
A representational image of gold jewellery. — AFP/file
A representational image of gold jewellery. — AFP/file

KARACHI: In a significant shift, gold prices in Pakistan dropped by Rs5,400 per tola on Thursday, reaching Rs276,800 in the local market, according to the All Sindh Saraf Jewellers Association.

This decrease follows a downward trend in the international market, where gold rates fell by $65 to $2,662 per ounce following the US elections.The price of 10 grams of gold also dropped, decreasing by Rs4,630 to a new rate of Rs237,311, reflecting the impact of both global and local market forces. Similarly, silver prices saw a reduction, with rates per tola down by Rs130 to Rs3,300, and 10-gram silver rates declining by Rs111.46 to Rs2,829.21.

Gold prices in Pakistan are typically influenced by international market trends, with local prices adjusted to include a premium of $20 per wounce over international rates. This recent drop is largely attributed to shifts in the US dollar’s strength in response to political developments.

Goldsmith Muhammad Shafi Khan commented on the potential market outlook, linking recent changes to the US presidential election. “With the recent success of Donald Trump, the dollar has strengthened, leading to a decrease in gold prices. If Trump follows through on his promise to resolve the Ukraine conflict, the dollar is likely to strengthen further, potentially causing gold prices to decline even more,” he said.However, Shafi cautioned that the price drop could be temporary, particularly if geopolitical tensions persist. “If the war in Ukraine is not brought to an end, we may see gold prices surge again,” he noted. According to him, Trump’s approach contrasts with Joe Biden’s, as Trump is expected to focus more on strengthening the US domestically, which may continue to affect the dollar’s position against gold.

“The dollar and gold tend to move in opposition,” Shafi explained. “If conflicts in Ukraine and the Israel-Palestine region are resolved under Trump’s administration, we might see the US dollar become stronger, with gold prices likely decreasing as a result.” Gold’s fluctuating prices continue to keep investors and market stakeholders alert, with the outlook for precious metals tied closely to both economic and geopolitical factors shaping the global landscape.