Gold prices in Pakistan witnessed a significant fall on Tuesday, helped by rupee’s recovery in the open market.
The price of 24-carat bar settled at Rs232,800 per tola, after single-day decrease of Rs6,300 per tola, according to rates shared by the All Pakistan Gems and Jewellers Sarafa Association (APGJSA).
The Pakistani rupee made significant recovery against the US dollar in the open-market, and was selling at 325 during trading on Tuesday, as the gap with the inter-bank rate narrowed.
“The recovery of local currency in the open market was behind a fall in gold prices on Tuesday,” Abdullah Abdul Razzak Chand, Vice President Society Jewellers Welfare Association, said.
On Monday, gold prices in Pakistan had declined by Rs700 per tola.
Currency dealers attributed the halt in currency’s fall in the open market to Chief of Army Staff (COAS) Asim Munir’s recent meetup with the business community on Sunday.
During the meeting, the army chief discussed the government’s economic plans and intentions to quell smuggling and speculative activity.
Meanwhile, analysts highlighted that supply demand forces are at play. “There are no buyers, only sellers in the market,” said an analyst.
Economic uncertainty in the country, high inflation, and devaluation have collectively affected gold retailers to a great extent.
“People are not buying jewellery as their purchasing power has shrunk because of inflation,” Chand said.
Investors move to gold as they seek a safe-haven at a time when the local currency loses its value. This results in a significant demand for raw gold.
The price of 10 gram gold on Tuesday also decreased by Rs5,402 to Rs199,588.
In the international market, the price of the precious metal declined by $9 to $1,931 per ounce.
Silver rates decreased by Rs100 to Rs2,800 per tola.