Gold rates tumble by thousands of rupees per tola as global bullion corrects amid stronger dollar and inflation fears.

ISLAMABAD: Gold prices in Pakistan witnessed a dramatic reversal on Thursday after a massive one-day surge the previous day, with 24-karat gold per tola dropping by Rs9,500 to settle at Rs494,662, according to the All Pakistan Sarafa Gems and Jewellers Association.

The sharp decline came just 24 hours after the yellow metal crossed the historic Rs500,000 per tola mark on Wednesday, when it jumped by Rs15,700 to reach Rs504,162.

This volatility has stunned investors and jewellers alike, highlighting the intense sensitivity of local rates to international movements.

The price of 10 grams of 24-karat gold also fell by Rs8,145, now trading at Rs424,092.

Meanwhile, 10 grams of 22-karat gold dropped by Rs7,466 to Rs388,765.

These figures reflect immediate transmission from global spot prices, where bullion faced selling pressure despite ongoing Middle East tensions.

International gold prices had spiked earlier in the week, with spot gold climbing toward $4,800 per ounce levels amid geopolitical risks.

However, a stronger US dollar and revised expectations for fewer Federal Reserve rate cuts triggered profit-taking and position unwinding.

Analysts note that rising oil prices above $100 per barrel due to supply concerns from the region have paradoxically weighed on gold.

Higher energy costs fuel inflation fears, reducing prospects for monetary easing and boosting the dollar, which makes dollar-denominated gold costlier for other buyers.

In Pakistan, the local market closely mirrors these shifts, amplified by import costs and rupee-dollar exchange rates.

The All Pakistan Sarafa Gems and Jewellers Association reported consistent alignment between domestic and global trends throughout the week.

On Wednesday alone, the per tola surge exceeded Rs15,000, pushing rates into uncharted territory above Rs500,000 for the first time in recent memory.

Such rapid swings have raised questions about market stability and investor sentiment.

Retail buyers who rushed in during the peak now face significant paper losses within hours.

Jewellers across major cities including Lahore, Karachi and Islamabad reported subdued footfall on Thursday as uncertainty gripped the trade.

Some dealers even paused fresh bookings awaiting further clarity on global cues.

Central bank gold purchases worldwide remain robust, with projections for 2026 still indicating hundreds of tonnes of buying.

Yet short-term dynamics dominated Thursday’s trading, with leveraged funds liquidating positions rapidly.

Pakistan’s gold imports and local fabrication demand have stayed resilient in recent months despite elevated prices.

However, this latest correction could encourage bargain hunting if the dip deepens further.

Economists tracking commodity markets point to multiple headwinds.

A firmer dollar index near recent highs has exerted downward pressure on precious metals.

Simultaneously, expectations of only limited rate cuts by the US Federal Reserve this year have diminished gold’s appeal as a non-yielding asset.

Geopolitical developments in the Middle East, while initially supportive, have now intertwined with oil-driven inflation concerns.

This complex interplay explains why gold failed to sustain gains despite persistent global uncertainties.

Silver prices also moved in tandem, though specific local figures were not immediately detailed by the association.

Market watchers expect continued volatility in the coming sessions as traders assess ceasefire prospects and energy market developments.

For Pakistani consumers, the drop offers temporary relief after weeks of relentless upward pressure on wedding and investment-related purchases.

Long-term outlook for gold remains constructive due to de-dollarization trends and central bank diversification strategies.

Yet near-term corrections like Thursday’s Rs9,500 plunge serve as stark reminders of the asset’s speculative swings.

Investors are advised to monitor both international spot rates and local currency fluctuations closely.

The All Pakistan Sarafa Gems and Jewellers Association continues to provide daily updates to ensure transparency in pricing.

This episode of extreme volatility underscores the interconnected nature of global commodities and Pakistan’s domestic economy.

As rates settle at Rs494,662 per tola for 24-karat gold, the market braces for potential further adjustments in the days ahead.