Gold Prices in Pakistan Surge Amid US Federal Reserve's Policy Announcement

Gold prices in Pakistan have risen to a new high of Rs275,900 per tola following a significant increase in international price fluctuations. The movement of the US dollar, triggered by the US Federal Reserve's policy announcement, has had a substantial impact on the gold market, causing prices to surge despite a slight decrease in international gold prices.

The recent hike in gold prices was marked by a Rs1,000 increase, indicating a noticeable shift in the local market's dynamics. This phenomenon may be attributed to the growing value of the US dollar, which emerged as a key factor in determining the gold price. Although the international rate of gold dropped slightly by 0.3%, the rupee's unstable performance in the open market allowed the dollar's strengthening to effectively translate into a higher gold price.

Pakistan's currency, the rupee, has been largely stable in the interbank market, witnessing a minor increase of 0.01%. However, in the open market, the rupee experienced a minor deprecation of 0.03 rupees. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), responsible for recording gold prices in Pakistan, the domestic price of gold has remained more closely tied to the fluctuations in the value of the US dollar rather than its international counterpart.

In a stark contrast, gold prices saw a definitive drop in the last update on December 18, 2024, with a 7% decline resulting in a new low . Prices fell to Rs271,300 per tola and Rs232,596 per 10-gram, reflecting a significant decrease of Rs2,000 and Rs1,715, respectively.

As global monetary policies continue to wield immense influence over financial markets, it will be exciting to observe whether Pakistan's gold prices will continue on their current trajectory or revert back to previous fluctuations following further announcements from the US Federal Reserve.