Gold prices surged by Rs2,500 in local markets, while the international bullion market reported a $12 decrease per ounce.
Gold Prices Surge Locally Despite Global Decline: An In-Depth Analysis
Islamabad: Gold prices in Pakistan have continued their upward trajectory, diverging from the recent global trend that has seen a decline in gold values for the second consecutive day. This divergence highlights the complex dynamics affecting the gold market both locally and internationally.
On Friday, the price of 24-carat gold in Pakistan increased by Rs200 per tola, bringing the new rate to Rs262,000. Similarly, the price of 10 grams of gold rose by Rs172, reaching Rs224,623. This local surge stands in stark contrast to the international bullion market, which reported a $12 decrease per ounce, lowering the global gold price to $2,492 per ounce.
This pattern follows a similar trend observed the previous day, where local gold prices surged by Rs800 per tola and Rs686 per 10 grams, despite an $8 decrease in the global market. The divergence between local and global gold prices reflects the unique factors influencing the Pakistani market, including domestic demand and currency fluctuations.
On August 17, gold prices in Pakistan saw a significant spike of Rs2,500 per tola, setting a new all-time high of Rs260,200 per tola (11.66 grams). This unprecedented rise was driven by strong global demand for the precious metal, fueled by concerns over potential depreciation of major world currencies and speculation about a possible reduction in US interest rates next month. According to the All Pakistan Saraf Gems and Jewellers Association, international gold prices also soared to a new record high, with the yellow metal increasing by $46 to reach $2,507 per ounce (31.10 grams).
Despite this historic high in the local market, the association noted that gold in Pakistan remains priced Rs4,500 per tola lower than in Dubai. This pricing discrepancy highlights the varying influences of local market conditions compared to international benchmarks.
In contrast, silver prices in Pakistan have remained stable, with the per tola price holding steady at Rs2,950 and the per 10 grams price unchanged at Rs2,529.14. This stability in silver prices amidst fluctuating gold values underscores the differing dynamics affecting the two precious metals.
Interactive Commodities Director Adnan Agar, speaking to The Express Tribune, indicated that world markets are currently speculating that gold prices may test the $2,600 to $2,700 per ounce range by mid-September 2024. However, Agar also cautioned that a substantial drop in gold prices cannot be ruled out. Financial institutions, which have been actively buying gold, might engage in profit-taking following a potential reduction in US interest rates, anticipated around mid-September.
The current trends in gold prices illustrate the complex interplay of domestic and international factors influencing the precious metal market. As gold prices continue to climb locally despite global declines, market participants and analysts are closely monitoring these developments to gauge future trends and potential impacts on investment strategies.