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The gold price in Pakistan fell to its lowest level in a single day on Tuesday, as the rupee rebounded marginally against the US dollar and investors focused on the US Federal Reserve's interest rate rise decision and policy outlook.
According to data supplied by the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) fell by Rs9,000 per tola and Rs7,716 per 10 kilos, respectively, to settle at Rs201,500 and Rs172,754.
The jewellers' group also stated that local gold was "overpriced" in Pakistan by Rs2,500 per tola when compared to the Dubai bullion market.
The gold rate has fallen as demand has fallen as investors appear to have abandoned the safe-haven commodity in favour of the greenback, which is now accessible on the open market following the lifting of the dollar limit.
After the events surrounding negotiations with the International Monetary Fund (IMF), the Pakistani rupee began to show signs of recovery today, rising roughly Rs2 versus the dollar to settle at Rs267.89.
Investors, on the other hand, were buying gold bars rather than jewellery, which not only lowered goldsmiths' profit margins but also put the labour force at risk of losing jobs, as jewellery manufacturers moved to other professions in the lack of work.
In the international market, spot gold fell $22 to $1,902 per ounce, its lowest level since January 19. However, bullion has risen 4.3% in January, putting it on track for a third consecutive monthly increase.
"Gold prices are feeling the strain created by a rising dollar as expectations rise ahead of the Fed rate decision and policy statement on Wednesday," said ActivTrades senior analyst Ricardo Evangelista.
Meanwhile, local silver prices fell by Rs50 per tola and Rs42.88 per 10 gramme to close at Rs2,250 and Rs1,929, respectively.
