A much-awaited relief for gold buyers and investors
After several weeks of relentless upward movement, gold prices in Pakistan have finally shown a downward correction, offering some breathing space to buyers, jewellers, and investors. The local bullion market — which had been hitting new records almost daily — witnessed its first notable decline this week, signaling a potential pause in the ongoing rally that has dominated the country’s financial landscape.
Recent Drop in Gold Prices
According to the All Pakistan Gems and Jewellers Association (APGJA), the price of 24-karat gold per tola fell by Rs. 10,600, bringing it down to Rs. 446,300. Meanwhile, the rate of 10 grams of gold decreased by Rs. 9,088, settling at Rs. 382,630.
The international gold market also saw a sharp correction, with prices dropping by $106 per ounce, now standing around $4,252. This decline follows a series of extraordinary gains earlier in the week — including a single-day surge of more than Rs. 14,000 per tola, followed by another Rs. 1,900 rise just two days prior.
The current dip marks the first major pullback after consecutive record-breaking highs that had pushed domestic gold prices above Rs. 456,000 per tola.
Why Are Gold Prices Falling Now?
Gold prices are influenced by multiple factors: international market trends, currency movement, inflation, and investor sentiment. The recent correction in Pakistan’s gold rates can be attributed to the following key reasons:
1. Global Market Correction
The international bullion market witnessed profit-taking after a prolonged rally. Investors who previously flocked to gold as a safe-haven asset amid economic uncertainties are now rebalancing their portfolios, leading to a softening in demand.
2. Stabilizing Pakistani Rupee
One of the primary drivers of the earlier price surge was the continuous depreciation of the rupee. However, recent indications of stabilization in the currency have eased pressure on import costs, thereby reducing local gold prices.
3. Decline in Safe-Haven Demand
With relative calm in international markets and easing fears around oil prices and global inflation, safe-haven demand for gold has weakened temporarily. This has directly contributed to the price drop in both local and international bullion markets.
Historical Context: Weeks of Unstoppable Growth
Over the last month, Pakistan’s bullion market had been on an unstoppable rise. Prices climbed from the Rs. 440,000 range to more than Rs. 456,000 per tola, fueled by:
- The rupee’s fall against the US dollar
- Heightened global uncertainty
- Surging demand among local investors seeking protection from inflation
Many analysts viewed the earlier rally as unsustainable, especially given that international gold rates were already near multi-year highs. The latest correction, therefore, may reflect the market’s natural tendency to balance after overextension.
Impact on Local Buyers and Jewellers
For ordinary citizens and jewellers alike, this downward shift comes as a welcome respite.
Jewellers in Karachi, Lahore, Islamabad, and Rawalpindi have reported improved foot traffic in local markets as potential buyers reconsider gold purchases they had postponed due to record-high prices. Similarly, small investors who had been waiting for a pullback may find the current rates more attractive for entry.
However, jewellers also remain cautious, noting that volatility is far from over. The global market’s reaction to upcoming US economic data and interest-rate expectations could once again shift the trend.
What’s Happening in the Global Market
Internationally, gold has been trading in a highly reactive pattern. The recent correction is linked to:
- Stronger US Treasury yields, which reduce gold’s appeal as a non-yielding asset
- Investor optimism about a controlled inflation outlook
- Profit-booking after months of continuous upward movement
Despite the pullback, analysts maintain that gold remains fundamentally supported due to ongoing geopolitical tensions, potential recession fears, and persistent inflation concerns worldwide.
Comparison With Regional Trends
Across Asia, similar adjustments have been observed. In India, gold futures dropped after a 4-day rally, while in China and the Middle East, dealers reported lower premiums as demand softened.
This global synchronization suggests that the Pakistani gold market’s correction is part of a wider international adjustment, not an isolated event.
Will Prices Continue to Drop?
Market experts are divided on what comes next. Some predict that gold prices could see further mild corrections if the rupee continues to stabilize and international prices remain under pressure. Others believe the dip is temporary, with long-term trends still pointing upward due to structural inflation and uncertain global growth.
For now, buyers are advised to monitor daily rates closely through credible associations such as the APGJA, which updates gold prices in Pakistan’s major cities — including Karachi, Lahore, Islamabad, and Rawalpindi — every evening.
Investor Sentiment and Future Outlook
Even with the current decline, gold remains one of Pakistan’s most trusted investment assets. Many households and investors treat it as a hedge against inflation and currency weakness, especially during times of economic uncertainty.
Financial advisors emphasize that short-term fluctuations should be viewed in context — the long-term trajectory of gold, historically, has remained upward. The present dip may offer an entry opportunity for investors with a medium- to long-term perspective.
How This Impacts the Broader Economy
Fluctuations in gold prices have ripple effects beyond the jewellery industry. When prices soar, it typically:
- Deters new buyers, reducing retail sales
- Increases imports, affecting foreign reserves
- Pushes up inflationary expectations
Conversely, a temporary price drop like this helps restore market equilibrium, encourages consumer activity, and reduces import pressure on the country’s external account — providing small but meaningful relief to the economy.
Local Market Reactions
Bullion dealers in major cities such as Karachi’s Sarafa Bazaar, Lahore’s Anarkali, and Rawalpindi’s Committee Chowk described the latest fall as “healthy for the market.”
One jeweller remarked that the correction “allows buyers to return and restores balance after panic-driven price hikes.”
Meanwhile, traders in Peshawar and Faisalabad echoed similar views, noting that a stable range between Rs. 440,000–Rs. 450,000 per tola would benefit both jewellers and customers.
International Factors to Watch
The direction of gold prices in the coming weeks will depend on several global economic indicators:
- US Federal Reserve interest-rate decisions
- Oil-price volatility
- Middle East and European geopolitical developments
- Chinese consumer demand
Any unexpected spike in inflation or currency depreciation could once again push investors toward gold, reigniting the rally.
Pakistan’s Gold Market Dynamics
Pakistan’s gold trade operates largely on imported raw gold, making it sensitive to global currency movements. When the rupee weakens, import costs rise, causing local prices to escalate even if international rates remain steady.
With the rupee showing marginal stability against the dollar, the local market has gained some relief. Yet, the underlying structural dependence on imports continues to make it vulnerable to global economic shocks.
Conclusion
The recent decline in gold prices in Pakistan marks a significant shift in market sentiment after weeks of unrelenting increases. Whether this represents a short-term pause or a longer cooling phase will depend on upcoming global economic indicators and domestic currency trends.
For now, the correction offers a momentary reprieve for buyers and jewellers while reminding investors that even safe-haven assets can experience volatility. Continuous monitoring of both domestic and global developments will be essential in understanding where the market heads next.
FAQs
1. What is the current gold price in Pakistan?
As of the latest update, 24-karat gold is priced at Rs. 446,300 per tola and Rs. 382,630 per 10 grams, according to the APGJA.
2. Why did gold prices drop after continuous increases?
The decline is mainly due to profit-taking in global markets, stabilizing currency movement, and a temporary fall in safe-haven demand.
3. How do international prices affect local gold rates?
Pakistan imports raw gold; thus, international price movements and the dollar-rupee exchange rate directly influence local market prices.
4. Will gold prices continue to fall in Pakistan?
Short-term volatility is possible, but long-term trends depend on currency stability and global economic conditions.
5. Where can I check daily gold prices in Pakistan?
Daily updates are available from the All Pakistan Gems and Jewellers Association and credible financial news sources such as Dawn and Profit Pakistan Today.
