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| At current prices, the looted gold is worth around $70 million. PHOTO: PIXABAY |
On Tuesday, gold prices in Pakistan took a sharp turn downward. The price of 24-karat gold per tola dropped by Rs 14,000 to reach Rs 416,362, compared with the previous trading day’s rate of Rs 430,362. The plunge comes after a two-day pause in major movement and follows trends abroad.
According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), 10 grams of 24-karat gold fell by Rs 12,003 — down from Rs 368,966 to Rs 356,963. At the same time, the 10-gram 22-karat gold rate dropped by Rs 11,004 to reach Rs 327,227 from Rs 338,231.
What drove the drop?
Several key factors combined to spark the drop in local gold rates:
- Global gold prices weakened significantly. The international benchmark dropped by roughly US $140 per ounce, taking the price down to around US $3,940.
- The local market is heavily affected by these global shifts because much of Pakistan’s gold supply is imported. A weaker demand internationally means cheaper imports and thus a local price correction.
- Consumer demand at home remained sluggish. With high inflation and currency fluctuations still a concern, many buyers delayed purchases rather than stepping in at elevated prices.
- Silver prices also moved down alongside gold. In Pakistan the price per tola of silver fell by Rs 173 to Rs 4,924, and 10-gram silver dropped by Rs 148 to Rs 4,221.
Impact on consumers and businesses
For consumers, this kind of drop can bring both relief and caution. On one hand, jewelry buyers may view the lower price point as a buying opportunity. On the other hand, those who purchased at higher rates may feel locked into losses or regret.
For jewelers and the broader industry, such a sharp drop has mixed implications:
- Inventory costs: Firms with existing stock bought at higher prices may now face a sub-optimal margin or loss when selling.
- Sales boost potential: If the lower price stimulates consumer interest (especially ahead of weddings or festivals), it might help clear stock and improve cash flow.
- Confidence effects: Sudden volatility may reduce appetite for larger purchases or investment in gold, both by consumers and investors.
What to watch moving forward
- Global factors: As international gold prices continue to shift, Pakistan’s market will likely follow. If the US dollar strengthens or global interest rates rise, gold may face further downward pressure.
- Currency movements: The value of the Pakistani rupee versus the US dollar remains critical. A weaker rupee pushes up import costs and thus gold prices; a stronger rupee helps moderate price rises or supports price drops.
- Domestic demand: Cultural buying—such as for weddings, festivals or as a hedge—is a key support for the gold market in Pakistan. If these sources of demand pick up, they can cushion the drop or reverse it.
- Inventory and business responses: Jewelers may adjust their inventory strategy, offer lighter pieces, promote smaller weights, or shift to alternative metals if gold remains volatile.
The sharp Rs 14,000 drop in the 24-karat gold price per tola on October 28 reflects a strong ripple effect from global market moves into Pakistan’s local gold sector. While the immediate correction may offer cost relief to some buyers, it also raises questions for those holding higher-priced stock and for the industry at large. The next few weeks will be telling in how demand, currency dynamics and global trends shape the next phase of gold pricing here.
This article aims to provide a clear, detailed view of the situation as of the stated date. Readers interested in purchasing or investing are advised to monitor ongoing updates from the APSGJA and market commentary.
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