Gold prices in Pakistan face yet another high

Domestic gold prices continue their record-breaking spree as 1 tola touched Rs 178,800 after gaining Rs 3,900 on Tuesday. This hike comes in a market where saving options are already restricted and risky.  

Since the beginning of January 2022, rates have increased by Rs 52,800 for 1 tola and Rs 45,096 for 10 grams. 

In a conversation with Pakistan Gems Jewelry Traders and Exporters Association (PGTEA), Profit learned that gold prices in Pakistan are higher than in the international market. “Price for 1 tola gold in Pakistan is Rs 8000-9000 higher than the price in the international market,” said Habib-ur-Rehman , Chairman of PGTEA. Rupee devaluation is the reason behind this, he explained. “Dollars have become unavailable in the open market and are available in black at a much higher rate of around Rs 260. Because of the lack of dollars, people are resorting to buying gold to save their money’s value, which has increased its price,” he said. 

Prices in the international market have also, however, been fluctuating. The immediate impact was the Russia-Ukraine war which increased the price by 4.44% in the first week of March 2022. “If the war had settled, gold prices in the international market would have come down to $1500 (compared to current $1750-1820),” said Rehman. He further said that the overall global economy also has an impact on gold. Due to recession, pure gold bricks have become a preferred choice for saving wealth rather than investing it somewhere else. “If such situations continue, prices are predicted to go up by 30-40%, somewhere around $2500 in the international market,” Rehman added.