Pakistan gold price falls by another Rs2,600

The gold price in Pakistan fell by Rs2,600 per tola since August 5. A tola of gold can now cost Rs108,600, according to the All Sindh Sarrafa Jewelers Association. 

The gold price stood at $1,742 per ounce in the international market by the time this story was filed after it decreased by another $21 on Monday. However, the gold price displayed a big fluctuation during the day, falling to as low as $1691 before recovering.  

Gold’s international price affects the prices in the local market.

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

“The developments in the US affect gold price,” said Adnan Agar, who is the operations director of AA Gold Commodities. “Negative news coming from big economies especially the US such as increasing deaths due to the pandemic or news of political instability such as riots push the gold price up. Positive news such as an increase in employment in the US negatively affects the gold price.”

“The recently revealed employment data of the US was better than expected. So, it has negatively affected gold,” he said.   

“The US economic data has revealed positive developments,” said Ahsan Mehanti, who is CEO and MD of Arif Habib Commodities. “Positive economic data strengthens the dollar, which negatively affects gold.”

“Moreover, the pandemic impact was now eroding off. The number of jobs is increasing. These factors are affecting the gold price,” he added.

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 do not seem lucrative.

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.

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

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.