Gold prices in Pakistan fell sharply on Friday, with the price of gold declining by Rs5,600 per tola to Rs456,736 as the precious metal also witnessed a significant drop in the international market.
According to the All Pakistan Gems and Jewellers Association, the price of 10 grams of gold decreased by Rs4,801 to Rs391,577.
The sharp decline in domestic gold prices came as international gold prices also fell substantially, with the price of gold in the global market declining by $56 to $4,342 per ounce.
The latest decline provides some relief to consumers and jewellery buyers after gold prices had remained at elevated levels, making jewellery and other gold purchases increasingly expensive for households.
Gold prices in Pakistan are influenced significantly by international bullion rates, while movements in the rupee-dollar exchange rate also affect the local price of the precious metal.
The decline in the international market has therefore translated into a notable reduction in domestic gold prices, although gold remains at a historically high level in the local market.
The drop in gold prices could also affect investment sentiment among consumers and investors who use the precious metal as a store of value and a hedge against economic uncertainty and currency depreciation.
Jewellers and market participants are likely to closely monitor international bullion prices and currency movements to determine the direction of domestic gold prices in the coming sessions.
The latest reduction means that investors and consumers holding gold have seen the value of their holdings decline compared with the previous session, while prospective buyers may view the correction as an opportunity to enter the market at a relatively lower price.
With international gold prices remaining the key external factor for the domestic market, further movements in global bullion rates and the exchange rate will remain important determinants of gold prices in Pakistan.