Karachi, November 7, 2023 – In a surprising turn of events, gold prices in Pakistan experienced a notable drop of Rs 200 on Tuesday, despite witnessing a massive fall in the international market. The price decline was attributed to the continuous depreciation of the Pakistani Rupee (PKR) against the US Dollar.
The 24-karat gold per Tola, a popular measurement for gold in the country, ended down by Rs 200 to reach Rs 214,000 in local markets. Similarly, 24-karat gold per 10 grams saw a decrease of Rs 172, closing at Rs 183,470 in the domestic market.
In contrast, the international gold market saw a sharp decline of $15, with gold prices ending at $1,988 per ounce. This drop in global prices was not as significantly reflected in local prices, and market experts attributed this discrepancy to the continuous depreciation of the Pakistani Rupee against the US Dollar.
Financial analysts suggest that the significant decline in international gold prices should have led to a more substantial decrease in the local market. However, the persistent weakening of the Pakistani Rupee counterbalanced this effect. It is important to note that a weaker PKR typically means that more of the local currency is required to purchase the same amount of foreign currency, such as the US Dollar.
A day earlier, the Pakistani Rupee faced an 11-session losing streak against the US Dollar, highlighting the economic challenges faced by the country. This continuous depreciation of the rupee has been a cause for concern among investors, as it can impact various sectors, including the prices of imported commodities like gold.
The drop in local gold prices, despite the global decline, underscores the interconnectedness of international and domestic financial markets and the influence of exchange rates on the prices of commodities like gold. As the Pakistani economy grapples with currency fluctuations, stakeholders will closely monitor these dynamics and their effects on various sectors, including the precious metals market.