Gold prices drop Rs11,700 per tola after record rally

KARACHI: After days of record-breaking gains, gold prices witnessed a steep decline in the local market on Wednesday, mirroring a significant downturn in the international bullion market. According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold dropped by Rs11,700 per tola, bringing the rate down to Rs352,000 per tola.

Similarly, the price of 10-gram gold fell by Rs10,031, closing at Rs301,783, ending a multi-week rally that saw prices climb to historic highs both locally and globally.In the international market, gold prices slid by $116, settling at $3,338 per ounce. Market analysts attributed the fall to profit-taking by investors. Local gold prices, typically adjusted with a premium of $20 per ounce over global rates, reflected the magnitude of the international drop.

This correction comes after a meteoric rise in the price of gold since the beginning of 2025. On January 1, 2025, gold was priced at Rs272,600 per tola locally and $2,614 per ounce internationally. As of April 22, it had peaked at Rs363,700 per tola and $3,454 per ounce, marking gains of over Rs91,000 per tola and $840 per ounce in under four months.

A local goldsmith, commenting on the drop, said, “This correction was long overdue. Gold had climbed too fast, too soon. Today’s decline is a healthy adjustment. The fundamentals are still strong, especially with the trade tensions between the US and China unresolved. We expect the prices to stabilise and begin climbing again.”

Despite the dip, sentiment in the bullion market remains cautiously optimistic. Traders note that global uncertainty, especially surrounding trade wars and currency depreciation, continues to support gold’s role as a safe-haven asset.

While gold prices saw a retreat, silver prices bucked the trend and continued their upward momentum. The price of silver increased by Rs16 to reach Rs3,457 per tola, and the 10-gram silver rate rose by Rs13 to Rs2,963. Bullion dealers noted that silver, which had remained relatively subdued during gold’s rally, is now beginning to attract investor attention as a lower-cost alternative for hedging in volatile markets.

Market watchers say short-term fluctuations in gold prices are to be expected, especially after such a steep surge, but long-term fundamentals, such as rising inflationary pressures and global economic instability, still favour a bullish outlook for precious metals.