Gold prices plunge by Rs10,400 per tola amid global easing

KARACHI: Gold prices in the local market saw a sharp decline of Rs10,400 per tola on Monday, as easing international economic tensions and improved regional stability prompted a pullback in demand for the precious metal.

According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold dropped to Rs340,500 per tola, while the 10-gram gold rate fell by Rs8,917 to Rs291,923.

The plunge mirrored a steep fall in the international market, where gold prices declined by $104, settling at $3,221 per ounce. Typically, gold rates in the Pakistani market are adjusted with a $20 premium over global prices to account for local factors including import costs, supply chains and domestic demand.

Analysts said the slump was triggered by two major developments: the announcement of a tariff reduction agreement between China and the US and easing geopolitical tensions between Pakistan and India.

Closer to home, improved diplomatic signals between Islamabad and New Delhi also helped cool investor nerves. The past few weeks had seen rising gold prices driven by fears of escalation following border tensions. But recent backchannel dialogue and a pause in hostile rhetoric have led to greater market stability.

The drop in gold prices follows weeks of volatility. On April 22, gold soared to a record high of Rs363,700 per tola, driven by global safe-haven demand amid geopolitical frictions and economic uncertainty.

Silver prices also experienced a modest decline. The price of silver per tola decreased by Rs17 to Rs3,400, while the 10-gram silver price slipped by Rs15 to Rs2,914.Market participants suggest that while the current trend appears bearish, any reversal in geopolitical or economic conditions could once again drive up gold demand.