Gold Sheds Rs61,050 per Tola in Two Days: What Triggered the Sharp Slide and What Comes Next

Gold prices in Pakistan have suffered a dramatic correction, shedding a massive Rs61,050 per tola over just two trading sessions, sending shockwaves through bullion markets, jewelry traders, and investors alike. The abrupt fall comes after weeks of heightened volatility, during which gold had surged to record highs on global uncertainty, geopolitical risks, and expectations of looser monetary policy in major economies.

According to market data from local bullion associations, the price of 24-karat gold per tola declined sharply as international prices retreated and the Pakistani rupee showed signs of relative stability against the US dollar. The sudden reversal has raised critical questions: what caused such a steep two-day drop, is the correction over, and what should buyers and investors expect in the near term?

Global gold retreat drives local crash

The primary driver behind the steep decline has been a sharp pullback in international gold prices. After rallying aggressively in recent weeks, global bullion markets entered a phase of profit-taking as investors reassessed their positions. A strengthening US dollar and a rebound in US Treasury yields reduced gold’s appeal as a non-yielding asset, prompting selling pressure across futures and spot markets.

International spot gold prices reportedly fell by tens of dollars per ounce within days, a move that quickly transmitted to local markets. In Pakistan, where gold pricing closely tracks global rates while factoring in the rupee-dollar parity and taxes, even modest international corrections can translate into large rupee-denominated swings.

Market analysts say the speed of the drop suggests speculative excess had built up during the previous rally, leaving prices vulnerable to a sharp unwind once sentiment turned.

Rupee stability adds to downward pressure

Another key factor behind the Rs61,050 per tola decline has been the relative stability of the Pakistani rupee against the US dollar. Over recent sessions, the rupee avoided major depreciation in the interbank market, limiting upward pressure on imported commodities, including gold.

Historically, sharp rupee weakness has often cushioned local gold prices even when global rates fall. This time, however, the absence of currency depreciation meant that the full impact of the international correction was passed on to domestic consumers.

Bullion traders note that even small improvements in exchange-rate expectations can significantly influence gold prices in Pakistan, where the metal is largely imported and priced in dollars.

Jewelry market reacts with caution

The sudden plunge has created mixed reactions in Pakistan’s jewelry markets. While potential buyers see the drop as an opportunity, traders remain cautious, uncertain whether prices have found a floor or if further declines are imminent.

Many jewelers report that footfall has increased modestly following the price fall, but buyers are hesitant to make large purchases, preferring to wait for clearer direction. Wedding-season demand, which often supports prices, has so far failed to offset the broader bearish sentiment.

“Customers are asking whether prices will fall further,” said a Karachi-based gold dealer. “After such a big drop in two days, people are nervous. No one wants to buy today and see prices lower tomorrow.”

Investors reassess safe-haven appeal

For investors, the sharp two-day correction has reignited debate over gold’s role as a safe-haven asset. While gold remains a long-term hedge against inflation, currency weakness, and geopolitical risk, short-term price movements are increasingly influenced by interest-rate expectations and speculative flows.

Recent signals from global central banks suggesting a cautious approach to rate cuts have reduced immediate fears of aggressive monetary easing. This shift has supported the dollar and pressured gold, at least in the short run.

Analysts emphasize that such corrections are not unusual after strong rallies. However, the scale of the Rs61,050 per tola decline underscores how quickly sentiment can reverse in overheated markets.

Is the correction over?

The big question now is whether gold prices have stabilized or if more downside lies ahead. Market watchers say much will depend on upcoming global economic data, particularly inflation readings, central bank commentary, and movements in the dollar index.

If US inflation remains sticky and interest rates stay higher for longer, gold could face continued pressure. Conversely, any renewed geopolitical tensions or signs of economic slowdown could revive safe-haven demand and trigger a rebound.

In the local context, fluctuations in the rupee will remain a decisive factor. Any renewed currency weakness could quickly lift gold prices, even if international rates remain under pressure.

What should buyers do?

Experts advise buyers and investors to adopt a cautious, staggered approach rather than trying to time the exact bottom. For long-term holders, gold still offers diversification benefits, but short-term traders should brace for continued volatility.

For consumers planning jewelry purchases, the recent decline has improved affordability compared to record highs, but patience may pay off if global uncertainty persists.

As one bullion analyst put it, “Gold has not lost its long-term shine, but the last two days are a reminder that prices don’t move in one direction forever.”

With Rs61,050 wiped off the per tola price in just two days, Pakistan’s gold market has entered a new phase—one defined by caution, recalibration, and heightened sensitivity to global cues. Whether this correction proves temporary or marks the start of a deeper pullback will become clearer in the days ahead.