Gold price falls in Pakistan

Gold’s price per tola dropped by Rs300 in Pakistan on Thursday, according to the rates compiled by the All Sindh Sarrafa Jewelers Association. A tola of gold is now selling for Rs110,300.

The gold price stood at $1,811 per ounce in the international market by the time this story was filed. Gold’s international price affects the prices in the local market.

Ounce is the metric used to quantify gold in the international market, while tola is used in Pakistan. A tola is approximately one-third of an ounce.  

Adnan Agar, who is the operations director of AA Gold Commodities, says gold was at the moment fluctuating within the range of $1780 and $1830 for the past one month.

“It is because the market expecting the US would tighten its monetary policy. It will reduce cash in the market to control inflation,” Agar said.

He thinks gold is at equilibrium at the moment and it may remain within the range.

“But to my understanding, the price of gold will slowly move downwards towards $1750,” Agar said.

Agar further said that Bitcoin and other cryptocurrencies have attracted investments, which otherwise used to go towards gold during uncertain times.

The prices of gold and other precious metals go up during uncertain times such as wars and disasters as they are considered safe havens for investment. Their prices fall when stable times are expected ahead. Investors turn to gold when the economy and stock market does is not reliable.

On the other hand, when the economy starts improving, investors tend to switch to the capital market from gold and other metals. The situation in the US, the biggest economy in the world, plays an important role in influencing gold prices globally.

The price of gold started going up internationally as countries across the world went into lockdowns in March 2020. It rose from $1,471 to reach an all-time high of $2,063 an ounce by August 6, 2020. The per tola price in Pakistan rose to Rs132,000 at the time.