Domestic Market Sees Sharp Decline
Gold prices in Pakistan dropped for the second consecutive day, reflecting a broader downward trend in the global market. A detailed breakdown can be seen in Gold Prices Drop in Pakistan Amid Global Market Decline
According to the All Pakistan Gems and Jewellers Association (APGJA), the price of gold per tola (11.66 grams) fell by 1,400 Pakistani rupees, bringing it down to PKR 355,200. Similarly, the rate for 10 grams of gold decreased by PKR 1,201, now standing at PKR 304,526.
The decline comes at a time when local markets, especially in Karachi, which serves as the country’s main bullion hub, are witnessing reduced demand from buyers. Jewelers report that many customers are adopting a wait-and-see approach, anticipating further price drops before making purchases.
Global Prices Also Under Pressure
The dip in Pakistan is closely tied to developments in the international market. Global gold prices fell by 14 US dollars per ounce, reaching USD 3,325.
Analysts point out that gold prices are highly sensitive to several global factors, including the strength of the US dollar, interest rate policies set by the Federal Reserve, and geopolitical tensions. A stronger dollar typically makes gold more expensive for holders of other currencies, dampening demand.
Why Gold Prices Matter for Pakistan
For Pakistan, fluctuations in gold prices carry significant consequences. Gold remains one of the most popular forms of investment and savings in the country, particularly during times of economic uncertainty. Families traditionally purchase gold jewelry for weddings and festivals, while small investors often view it as a hedge against inflation and currency depreciation.
With Pakistan’s rupee under pressure in recent years, gold prices in local terms have often surged even when international rates remained stable. This recent fall, however, offers some relief to buyers who had been priced out of the market during earlier record highs.
Investor Sentiment and Economic Outlook
Economic experts suggest that the latest decline in gold prices could shift investment patterns, as highlighted in Gold Prices Continue to Decline Across Pakistan Lower rates may encourage jewelry purchases, but some investors may hesitate, fearing further drops.
“Gold in Pakistan often moves in line with the global trend,” said a Karachi-based jeweler. “However, the exchange rate also plays a major role. Even a small fluctuation in the rupee against the dollar can dramatically change local prices.”
At the same time, global investors continue to track signals from the US Federal Reserve regarding possible interest rate adjustments. If rates remain high, gold could face continued downward pressure, as investors might prefer interest-bearing assets.
The Broader Context
Historically, gold demand in Pakistan spikes during wedding seasons and festive months. Yet, high inflation and reduced purchasing power have already slowed consumer spending. With current prices still significantly higher than five years ago, many middle-income families struggle to afford gold jewelry.
According to the World Gold Council, global demand for gold in 2024 softened compared to the previous year, partly due to central banks moderating their purchases. This has contributed to recent price corrections worldwide.
Outlook
While the current decline may provide short-term relief to buyers, experts warn that volatility is likely to continue. International developments — including changes in oil prices, geopolitical tensions, and central bank decisions — will remain critical in shaping gold’s trajectory.
For now, both jewelers and consumers in Pakistan are closely watching the market. Any further drop could revive demand, but uncertainty about the rupee and the global economy continues to weigh heavily on investor confidence.
