Gold prices crash to Rs199,500 per tola as bullion reopens after 27 days

October 10, 2023 (MLN): The domestic bullion has finally resumed operations after being closed for 27 days, with 24-karat gold concluding today’s session at Rs199,500, reflecting a decline of Rs15,500 per tola from its previous closing value of Rs215,000 on September 12.

The Karachi Sarafa Association reported that the price of 10-gram 24-karat gold closed today's session with a decrease of Rs13,546, settling at Rs171,039.

Similarly, the price of 10-gram 22-karat gold was noted at Rs156,786, down by Rs11,911.

The bullion was closed due to the general public rushing to accumulate gold while it was available at lower rates. Thus, the bullion did not release rates.

The surge in gold transactions, attributed to the dollar's declining value, led the authorities to crack down against gold dealers, causing panic in the bullion market.

To note, today's closing marked a significant milestone for the Pakistani Rupee (PKR) as it extended its impressive streak to 24 consecutive trading sessions of gains against the US dollar, setting a historic record.

Theoretically, since gold is denominated in U.S. dollars when the local unit appreciates against the greenback, the value of PKR-denominated gold falls.

The strengthening of the local currency is attributed to the army-backed crackdown to restrict illegal dollar outflows, coupled with additional measures taken by the government.

It is important to mention that in a bid to enhance transparency within the gold market, the State Bank of Pakistan (SBP) has now authorized all gold dealers to calculate domestic bullion rates using the interbank exchange rate.

Additionally, the Federal Ministry of Industries and Production has established a 15-member advisory council that will review existing policies related to the gold trade, standards, certification, and value addition.

The council will also propose a self-sustainable institutional arrangement for the regulation of the sector, including establishing the Pakistan Gems and Jewelry Development Authority (PGJDA) as already approved by the Cabinet in principle.

Haji Haroon Rasheed Chand, the President of the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) earlier on September 19 informed that despite the bullion being officially closed, certain market dealers were still operating through hidden channels.

He issued a stern warning to all covert bullion operators, urging them to cease their illegal activities.

These illicit practices have been negatively impacting the market, and he emphasized the urgent need to put an end to them.

On the global front, international spot gold is currently trading at $1856.04, down by 0.28% compared to the previous close.

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