Gold Prices Take Sharp Dip of Rs 3,500 in Pakistan

Gold Prices Take Sharp Dip of Rs 3,500 in Pakistan

Karachi, April 22, 2024 – The gold market in Pakistan experienced a significant downturn on Monday, with prices dropping by Rs 3,500, marking one of the steepest single-day declines in recent times.

This sharp fall aligns with the trends in the international markets where gold prices also fell substantially.

In the local bullion markets, the price for 24-karat gold per tola tumbled to Rs 248,700 from a previous high of Rs 252,200. Similarly, the price for 24-karat gold per 10 grams saw a decline of Rs 3,021, settling at Rs 213,220, down from Rs 216,221.

This downturn mirrors the movements in the global markets, where gold prices closed at $2,381 an ounce, a $30 drop from the previous rate of $2,411. Market analysts have been closely monitoring these shifts, attributing the global decline to a variety of economic factors that have prompted investors to adjust their portfolios.

Experts in the bullion market suggest that the drop in gold prices may be linked to a strengthening U.S. dollar and the recent data suggesting improvements in the U.S. economy, which have lessened the appeal of gold as a safe haven. Furthermore, speculation about potential interest rate hikes by major central banks has also played a significant role in influencing gold markets worldwide.

Gold traditionally has been a safe asset for investors during times of economic uncertainty,” said a senior commodity analyst at Karachi Financial Services. “However, with the recent positive economic indicators from the U.S. and expectations of policy tightening, investors seem to be shifting towards more yield-bearing assets, thus impacting the gold prices negatively.”

This sentiment is echoed across local jewelers who are experiencing a decrease in customer footfall due to the high gold prices. The sudden price drop has created a wait-and-watch situation among buyers, making them hesitant to make purchases as they anticipate further declines,” explained by an owner of a popular jewelry store in Karachi.

Market watchers also note that the decline could be temporary given the complex geopolitical landscape and ongoing economic uncertainties, such as those related to oil price fluctuations and international trade tensions. These factors might yet sway investors back towards gold if they lead to increased market volatility.

The current price levels, despite the drop, are still relatively high, which continues to affect the retail gold market in Pakistan. Consumers remain cautious, and the volume of transactions in the gold jewelry sector has seen a noticeable decrease.

As market conditions continue to evolve, investors and consumers alike are advised to stay informed and consider a range of factors when making decisions related to gold investments or purchases. The coming weeks will be critical in determining if the gold price will stabilize or if the market is in for more fluctuations.