Karachi, August 23, 2023 – In a surprising turn of events, gold rates in Pakistan experienced a dramatic fall on Wednesday, defying expectations linked to the historic low of the Pakistani Rupee (PKR) and the surge in the international price of the precious metal.
The 24-karat gold per tola tumbled by Rs 1,900 to close at Rs 232,600 in the local market. Similarly, the price of 24-karat gold per 10 grams saw a significant decrease of Rs 1,629, ending at Rs 199,417.
READ MORE: Gold Prices Surge by Rs 4,600 Following Historic Fall of Pakistani Rupee
The Pakistani Rupee (PKR) had hit a record low on August 23, 2023, reaching an exchange rate of PKR 299.63 to the US dollar in the interbank foreign exchange market. This devaluation of the rupee was expected to drive up the price of imported commodities, including gold, which is heavily influenced by international market dynamics.
In contrast to these expectations, the domestic gold prices experienced an unexpected decline. Even in the international market, the price of gold only increased by $3, closing at $1,904 per ounce.
READ MORE: Gold Prices Soar by Rs 3,100 as PKR Takes a Dive Against the Dollar
This perplexing scenario has left experts and investors alike puzzled. Typically, a depreciating local currency coupled with a rise in the global price of gold would lead to higher gold rates in Pakistan, as it becomes more expensive to import the precious metal. However, the current situation seems to defy this economic logic.
Experts suggest that various factors may be contributing to this anomaly. One possible explanation could be the local demand-supply dynamics. A decrease in domestic demand for gold jewelry and coins due to economic uncertainty or other market forces may have offset the expected price increase driven by the weak rupee.
READ MORE: Gold Prices Rise in Pakistan on August 18 Despite Global Market Decline
Additionally, government policies and interventions in the gold market may have played a role in stabilizing prices. Authorities may have imposed restrictions on gold imports or engaged in other measures to mitigate the impact of currency devaluation on essential commodities.
The unexpected drop in gold rates, despite the ongoing rupee debacle and global price hikes, presents an interesting puzzle for economists, investors, and policymakers to unravel. It underscores the intricate and often unpredictable nature of the factors influencing commodity prices in the ever-evolving global economic landscape.
READ MORE: Gold Rates in Pakistan Climb Up to Rs 225,000 per Tola
As Pakistan’s economy navigates these uncertain waters, market participants will be closely monitoring the gold market for further insights into the intricate interplay of local and global economic forces.
