Karachi, November 3, 2023 – The gold prices experienced a substantial surge in Pakistan, increasing by Rs 1,100 on Friday owing to depreciation of Pakistani Rupee (PKR).
This remarkable rise in the price of the precious metal is primarily attributed to the depreciation of the Pakistani Rupee (PKR) against the US dollar. As a result, gold has become more expensive for local consumers.
The 24-karat gold, highly sought after by investors and jewelry enthusiasts, climbed by a significant margin, reaching an impressive Rs 214,400 in the local market. Meanwhile, the 24-karat gold also saw an appreciable increase of Rs 943, concluding the day at Rs 183,813 in the domestic market.
Financial analysts have been quick to attribute this substantial price surge to the sustained depreciation of the Pakistani Rupee. Over the course of nine consecutive days, the PKR has experienced a steady fall against the US dollar, leading to increased costs for importing various goods, including gold. This trend has significantly affected the domestic market and the purchasing power of consumers.
In contrast to the local market’s dynamics, the global prices of gold remained relatively stable. The international gold market, which has a strong influence on local prices, saw gold trading at $2,005 per ounce, maintaining its value without substantial fluctuations.
The depreciation of the Pakistani Rupee is a matter of concern for both the government and consumers, as it can have far-reaching implications on the country’s economy. A weaker PKR can lead to higher import costs, increasing the prices of essential commodities such as oil, electronics, and other goods, contributing to inflationary pressures. Moreover, it can also make servicing foreign debt more expensive, impacting Pakistan’s fiscal position.
In response to the declining value of the PKR, the State Bank of Pakistan has taken various measures to stabilize the currency. These measures include intervening in the foreign exchange market to counter speculative attacks on the Rupee and maintaining a flexible exchange rate regime. Nevertheless, the sustained depreciation reflects broader economic challenges and vulnerabilities that need to be addressed comprehensively.
The surge in gold prices has also left its mark on the local gold market and consumers. Jewelry stores and gold traders have reported a noticeable decrease in the volume of sales, as higher prices have deterred many potential buyers. Jewelry, which is a popular choice for gifting and special occasions, has become less affordable, prompting consumers to rethink their purchase decisions.
