Gold price in Pakistan witnessed a drop of nearly 8% since February 1 owing to stability in exchange rates, depleting purchasing power and fall in yellow metal’s international price.
The per tola price of gold dropped to Rs194,100 on Saturday against all-time high of Rs210,500 on January 30 – less than a month ago, according to data shared by the All Pakistan Gems and Jewellers Sarafa Association (APGJSA).
Gold price retreated Rs2,000 per tola in the last two days alone.
Last month, market experts blamed speculators for inflating the price of the precious metal amid rupee depreciation.
“Speculation issue has largely settled in the gold market however, the demand for jewelry in the market is negligible,” APGJSA President Haroon Chand said.
The seasoned gold merchant said that the short-term outlook of the yellow metal appeared to be on the downside but he expects its price to go up in the long run.
Pakistan is witnessing what some experts, such as economist Murtaza Syed, have termed the worst economic crisis in history. The rupee has depreciated significantly – over 20% in the ongoing fiscal year so far.
The confidence of the public in the local currency reduced as people thronged to buy foreign exchange such as dollars. After State Bank of Pakistan’s restrictions on selling forex to the general public, gold became the best avenue for the public to park its savings.
The drop in domestic price of gold in February coincides with its international price that dropped $107 to $1,811 per ounce last month. However prior to this, the gold price was moving up in Pakistan regardless of the direction of international price.
AA Gold Commodities Director Adnan Agar said that the expectation of resumption of the International Monetary Fund (IMF) programme and the recent announcement of Finance Minister Ishaq Dar regarding the receipt of $700 million from China had stabilised the market.
“The price of gold may remain stable for some time because market expects the economy to stabilise in the short term,” he said.
However, he also expected uncertain times in the long run and said that he saw rupee depreciating further and gold prices climbing after a short respite.