
Gold reached a new all-time high at Rs254,000 per tola (11.66 grams) in Pakistan on Thursday, marking a historic moment in line with the global record-breaking trend.
The data released by All Sindh Sarafa and Jewellers Association (ASSJA), the price of gold increased by Rs4,600 per tola and Rs3,944 per 10 grams to settle at Rs254,000 and Rs217,764.
The market reopened after a break of four days as the bullion market remained closed from Monday-Wednesday on account of Ashura.
The association reported that the price of gold has been “under cost” by Rs4,000 per tola in Pakistan, as compared to prices in Dubai. This means that, at present, the Pakistani gold market is less expensive than the world market.
Silver prices in Pakistan remained unchanged at Rs2,900 per tola and Rs2,486.28 per 10 grams, respectively.
It should be noted that the gold rate in Pakistan hit the then all-time high of Rs252,200 per tola in April 2024.
In the international market, the gold prices notched up an all-time high, as growing optimism for an interest-rate cut from the US Federal Reserve in September and a weaker dollar boosted demand.
Spot gold dropped about 0.6% to $2,454.98 per ounce by 1748 GMT due to profit-taking after hitting an all-time high of $2,483.60 earlier in the session. US gold futures settled 0.3% lower to $2,459.90 per ounce.
"The expectation that we are getting closer to a Fed interest rate cut and we've seen this as yields continue to slowly grind lower in anticipation, that, along with a weaker dollar, are the main supportive factors behind this gold move," said David Meger, director of alternative investments and trading at High Ridge Futures.
It should be noted that lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
How is gold price determined in Pakistan?
Gold price in Pakistan is announced by the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), which determines gold prices in Pakistan for local markets six days a week from Monday to Saturday.
Pakistan is a small market for gold at the global level. It meets the commodity’s demand through imports as it does not produce the precious metal locally.
Accordingly, the gold rate in Pakistan is determined by keeping in view its prices in world markets, rupee-dollar exchange rate, and demand and supply in domestic markets. The latest price for local markets was determined to keep in view the prices at which trade took place among buyers and sellers.