Decline in Gold Prices by Rs1,300 per Tola in Pakistan

The local gold market faced a significant setback on Wednesday, witnessing a sharp decrease of Rs1,300 per tola for 24-karat gold, reaching Rs220,000.

As per the Karachi Sarafa Association, the price of 10 grams of 24-karat gold plummeted to Rs188,614, marking a loss of Rs1,115. Similarly, the price of 10 grams of 22-karat gold fell to Rs172,897, down by Rs1,021.

It's noteworthy that domestic bullion investors experienced substantial gains in 2023, with the yellow metal yielding an impressive 19.63% return for the year.

Closing 2023 at Rs220,000 per tola, 24-karat gold showed a significant rise from the previous year's closing price of Rs183,900 per tola during the same period.

The recent decline in local bullion prices is attributed to the international gold prices' decrease and the strengthening of the domestic currency.

International prices closed the first trading session of 2024 in the red zone, marking the third consecutive decline. Although spot prices exhibited a minor rise today, it wasn't substantial enough to offset the losses from the previous session, resulting in local market declines.

Moreover, the Pakistani Rupee (PKR) made gains against the U.S. Dollar, currently trading at PKR 281.57/281.97 per USD, further pressuring the gold prices downwards.

The relationship between domestic gold prices and the local Rupee lies in the metal being denominated in U.S. dollars. As the home currency strengthens against the greenback, the value of gold experiences a decline.