Due to sluggish domestic demand and the rupee’s depreciation versus the US dollar, gold prices in Pakistan have largely ignored trends in the global market. The gem and jewellery business appears to provide enormous economic potential, including potential for increasing our exports, even though economic and political instability is anticipated to keep consumer enthusiasm low.
International gold prices fell to their lowest point in April 2020 in September before declining 10% this year through October 31. The US Federal Reserve aggressively increased interest rates at the same time as this, which diminished the appeal of asset classes that offer no interest.
A rising Dollar Index is another element contributing to the global market’s weakness for gold. Through lower demand, a stronger dollar helps maintain the price of gold by making the commodity more expensive in other currencies.
Two key factors, the dollar exchange rate and the weak demand, according to Sheikh Asif Idress, president of the Gems and Jewellers Association of Rawalpindi.
Since January 4, 2022, when the rate stood at 176.75 against the dollar, the rupee has lost 25% of its value. Therefore, despite a decline in gold prices globally, domestic customers still had to pay more because of a depreciating rupee.
On Tuesday, the price of a tola of gold in Pakistan was almost Rs. 152,000.
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