In light of the uncertain situation surrounding the United States debt ceiling, the price of gold, a popular safe-haven investment, has once again dropped in Pakistan. The All Pakistan Sarafa Gems and Jewellers Association (APSGJA) reported a decrease in the rate of gold (24 carats) by Rs2,000 per tola and Rs1,714 per 10 grams, settling at Rs233,100 and Rs199,846, respectively.
The international price of gold experienced a decline of $9 per ounce, reaching $2,006. Consequently, the domestic rate followed suit and decreased accordingly. The US Congress is yet to raise the federal debt ceiling, which currently stands at $31.4 trillion. Treasury Secretary Janet Yellen has cautioned that failure to raise the debt ceiling would lead to a shortage of funds to pay government bills, potentially triggering the first-ever US default. Yellen has warned that this scenario would have severe economic consequences for the US and global economies.
In recent times, gold prices in Pakistan have been on an upward trend due to various factors, including economic and political turmoil, high inflation, and currency depreciation. During such uncertain times, people often turn to gold as a safe investment and a hedge against market volatility. On May 10, the price of gold reached an all-time high of Rs240,000 per tola due to increased political uncertainty following the arrest of Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan. Subsequently, the price of gold dropped in line with the international rate decline.
The APSGJA highlighted that the local price of gold in Pakistan is Rs3,500 per tola higher compared to the Dubai bullion market. This disparity in price was noted by the jeweler’s body.
Additionally, the price of silver also experienced a decrease, with a reduction of Rs50 per tola and Rs42.86 per 10 grams, settling at Rs2,950 and Rs2,529.14, respectively.