Karachi: The price of per tola gold in the country witnessed a significant decrease of PKR 3,094 today.
According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), this drop of PKR 3,094 has brought the price of one tola of gold down to PKR 452,233.
Similarly, the price of 10 grams of gold also decreased by PKR 2,785, bringing its new rate to PKR 386,987. On the other hand, in the international market, the value of gold fell by $30, settling at $4,297 per ounce.
Gold is globally recognized as a premier safe-haven asset, and its pricing is determined by a complex interplay of international and domestic economic factors.
The primary driver of gold rates is the global demand-and-supply dynamic, highly influenced by international market fluctuations.
When global economic uncertainty, geopolitical tensions, or inflation rates rise, investors flock to gold to safeguard their capital, driving the price per ounce upward. Conversely, stability in global markets often leads to a decline in gold value.
Another critical factor is the monetary policy of major central banks, particularly the US Federal Reserve.
When the Federal Reserve raises interest rates, yield-bearing assets like bonds become more attractive, causing investors to shift away from non-yielding gold, which subsequently depresses gold prices.
Furthermore, since international gold is traded in US Dollars, the strength of the dollar inversely affects gold; a strengthening dollar makes gold more expensive for holders of other currencies, reducing demand and lowering prices.
On a domestic level in Pakistan, gold prices do not solely rely on international rates but are heavily dictated by the local currency’s value and economic stability.
Because Pakistan imports its gold, any depreciation of the Pakistani Rupee (PKR) against the US Dollar automatically inflates the local cost of gold, even if international prices remain stable.
Conversely, a strengthening rupee can cushion local prices.
Additionally, local demand during the traditional wedding and festival seasons, coupled with domestic inflation levels where citizens buy gold as an inflation hedge, significantly sways the final daily rates issued by local bullion associations.
