Gold prices in Pakistan fell sharply on Friday, with the price of 24-karat gold dropping by Rs5,100 per tola to Rs420,536, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). The price of 10 grams of gold fell by Rs4,373 to Rs360,541, while 22-karat gold for 10 grams declined by Rs4,009 to Rs330,507.
A tola is the traditional unit used in Pakistan’s gold market, equal to about 11.66 grams. Jewellers quote gold per tola and per 10 grams, and the association’s daily rate is the reference that local markets follow, although the price a shop charges can differ because of making charges and city differences.
A global fall, not a local one
The local fall followed the international market lower. The global gold price fell by $51 per ounce to $3,980. When world prices fall, Pakistani prices usually follow, because gold is traded internationally in US dollars and its local price is worked out from the world price and the rupee-dollar rate.
The rupee itself was steady, which underlines that this was a global move rather than a currency move. On Thursday the rupee had closed at Rs276.76 against the US dollar, gaining just one paisa from Rs276.77 a day earlier. With the currency broadly stable, the Rs5,100 drop in the tola price came almost entirely from the fall in the world price.
Silver fell too
Silver moved in the same direction. The price of silver fell by Rs238 per tola to Rs5,530, while 10 grams of silver declined by Rs204 to Rs4,741. In the international market, silver fell by $2.38 to $50.52 per ounce. Silver often moves with gold, but it is also an industrial metal, so its price also reflects demand from factories and electronics makers.
The fall also reverses part of a recent rise. On Wednesday gold had gained Rs3,500 per tola to reach Rs425,636, and on Thursday it was unchanged at that level even as world prices slipped, because stronger-than-expected United States inflation data had raised expectations of a possible US interest rate rise later this year. Higher US rates tend to weigh on gold, because gold pays no interest, so it looks less attractive when interest-bearing investments pay more.
What this means
For ordinary readers, Friday’s drop is good news for anyone planning to buy gold, and unwelcome news for anyone holding it as a store of value — but one day’s move is not a trend. Gold has moved sharply in both directions in recent weeks, and a single fall does not tell buyers whether prices will keep falling or bounce back. Anyone buying jewellery should confirm the day’s Sarafa rate with a local jeweller and ask what making charges are included, since the association’s rate does not include them. As with any asset, a price fall alone is not a reason to buy or sell.
Sources: Business Recorder, Aaj News, Samaa TV, UrduPoint (APP). Written in our own words for information only — not investment advice.