KARACHI – The relentless upward climb of gold prices in Pakistan has continued for a second consecutive day, pushing rates dangerously close to the psychological benchmark of PKR 400,000 per tola. According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold surged by another PKR 5,100 on Tuesday, bringing the per tola rate to PKR 398,800.
Similarly, the rate for 10 grams of gold increased by PKR 4,372, reaching PKR 341,906. On the international stage, the yellow metal also saw an impressive jump, rising by USD 51 to trade at USD 3,770 per ounce.
This surge follows Monday’s spike, when prices in the local market jumped by PKR 3,400, pushing per tola rates to PKR 393,700. In just two trading sessions, gold prices have escalated by more than PKR 8,500, reflecting both global trends and domestic market pressures.
Local and International Drivers
The sharp upward trajectory of gold prices in Pakistan can be attributed to multiple factors. Internationally, gold has been witnessing a rally due to heightened economic uncertainty, global inflationary pressures, and the ongoing strength of safe-haven demand. With major economies facing currency volatility and stock market instability, investors are flocking towards gold, traditionally considered a secure store of value.
Domestically, however, the situation is further complicated by Pakistan’s economic woes. Persistent inflation, rupee depreciation, and the rising cost of imports have magnified the impact of global price shifts on the local market. Import restrictions and fluctuating dollar availability have also contributed to volatility in precious metals.
Market Reactions and Consumer Concerns
Jewellers in Karachi and other major cities report declining footfall in retail markets, as ordinary consumers find it increasingly difficult to afford jewelry purchases. Demand for gold ornaments has slowed significantly, with most buyers limiting themselves to essential purchases such as bridal sets, while casual buying has nearly vanished.
Despite sluggish retail demand, bullion prices remain firm due to investor interest. Many individuals see gold as a hedge against Pakistan’s volatile currency and high inflation, preferring to park their savings in gold rather than in cash or bank deposits.
Traders, however, express concern that the soaring prices are damaging the traditional gold market in Pakistan, which heavily relies on weddings and cultural events for demand. With affordability at an all-time low, the jewelry sector is experiencing stagnation despite record-high valuations of the metal.
Approaching the PKR 400,000 Mark
The PKR 400,000 per tola mark looms large over the market, serving as both a psychological and financial barrier. Crossing this level would represent an unprecedented milestone in Pakistan’s economic history and could trigger further speculation in the gold trade.
Analysts warn that unless international prices stabilize and the Pakistani rupee strengthens against the dollar, local gold prices may breach this threshold sooner rather than later. With the global economy showing no signs of relief and central banks around the world maintaining cautious monetary policies, gold’s rally appears far from over.
Looking Ahead
The future of gold prices in Pakistan will continue to hinge on two key factors: global market sentiment and domestic currency performance. Any further depreciation of the rupee against the dollar is likely to amplify international price increases, fueling even sharper hikes in the local market.
While investors view this trend as an opportunity, households and jewelers remain worried about the long-term impact on cultural practices and retail markets. The rising costs may force a shift towards lighter jewelry sets or alternative metals, reshaping consumer behavior in the country.
For now, the gold market remains caught between international demand dynamics and Pakistan’s domestic economic struggles. As the yellow metal edges ever closer to PKR 400,000 per tola, the burden on ordinary consumers deepens, reflecting the broader challenges facing the nation’s fragile economy.
