Days after hitting an all-time high, the price of gold fell sharply and was traded at a two-week low of Rs66,000 per tola, according to the data compiled by All Sindh Saraf and Jewellers Association.
Gold prices have been volatile in the last week or so. The price of tola appreciated sharply in the previous weeks and reached a historic high of Rs67,950 on Wednesday, December 19. However, it fell sharply in the days ahead of Christmas, dropping to Rs66,000 per tola, slightly above the level of December 13.
Pakistani traders adjust gold prices based on price movements in the international market and fluctuation in the dollar rates as well as market forces of demand and supply.
The prices compiled by ASSJA come with a lag of a day after changes in international prices. Last week gold dipped slightly amid political uncertainty in the U.S. market. However, it rallied again on Christmas as dollar also fell—gold usually goes up when dollar falls as investors move away from dollar backed funds to gold and vice versa.
When looked in the longer context, rupee depreciation, international price and local demand has been driving the gold rates up. For example, gold prices increased by 7% in the last three months. The trend may hold for a while given the uncertainty around rupee-dollar exchange rates.
When last checked, the gold was trading at $1,276 per ounce in the international market, which is its highest level in the last six months.