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The gold rate in Pakistan witnessed a second consecutive day of decline on Friday, mirroring the changes in the international market. Data provided by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA) indicated a drop in the price of gold (24 carats) by Rs6,500 per tola and Rs5,573 per 10 grams, bringing the rates to Rs230,800 and Rs197,874, respectively.
The recent surge in the value of the yellow metal had reached a record high on May 10 due to heightened political uncertainty and violence following the arrest of Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan.
Simultaneously, the international gold rate experienced a decrease of $33, settling at $2,005 per ounce.
Market analysts anticipate continued fluctuations in the international gold rate throughout May, primarily driven by the uncertainty surrounding the United States’ debt ceiling, a matter currently under consideration by Congress.
In Pakistan, gold prices have been consistently reaching new highs, influenced by various factors such as economic and political turmoil, high inflation, and currency depreciation. During times of instability, people tend to turn to gold as a safe investment and a hedge against volatility.
Despite several months of negotiations, the government has yet to finalize a staff-level agreement with the International Monetary Fund (IMF) for a crucial economic bailout. International agencies have warned that Pakistan faces the risk of default once the current loan program concludes.
The country’s foreign exchange reserves are critically low, barely sufficient to cover a month’s worth of imports, and on May 11, the rupee hit a new low of Rs300 against the US dollar.
In addition to these economic challenges, Pakistan is grappling with record-high inflation, currently the highest in South Asia, and widespread protests erupting following Imran Khan’s arrest.
