How Is the Gold Rate Decided in Pakistan? A Simple Explanation

Every morning jewellers across Pakistan update their boards with a new gold rate. Today that rate is Rs 411,583 per tola for 24 karat gold. But who decides it, and why does it change almost every day?

Step 1: the international gold price

Gold is traded around the clock in London, New York, Shanghai and Dubai. The price you see quoted as "spot gold" — currently $3,907.30 per troy ounce — is set by that global market. Pakistan imports most of the gold it uses, so the local price starts from this international figure.

Step 2: converting ounces to tola and dollars to rupees

A troy ounce is 31.1035 grams and a tola is 11.6638 grams, so one tola is about 0.375 ounces. The world price is converted to a per-tola price and then multiplied by the dollar rate:

Tola price ≈ (international price per ounce ÷ 31.1035 × 11.6638) × USD/PKR rate

This is why the gold rate can rise even on a day when world gold is flat: if the rupee weakens against the dollar, every tola costs more rupees. The reverse is also true — a stronger rupee can pull the local price down.

Step 3: the Sarafa market adjustment

The published rate in Pakistan is announced by the jewellers' associations — the All Pakistan Gems and Jewellers Sarafa Association and city Sarafa bazaars such as Karachi's. Their rate is based on the international parity above, but it also reflects local conditions:

• Supply and import costs — duties, the cost of bringing gold in, and how easily dealers can buy dollars.
• Local demand — wedding seasons and festivals push demand up; the local rate can trade at a premium to parity.
• The open-market dollar — dealers often price against the open-market exchange rate, not only the interbank rate.

The difference between the Sarafa rate and pure international parity is usually small, but it can widen when the rupee is under pressure or when imports are restricted.

Why the rate is quoted for 24K

The headline rate is for 24 karat (99.9% pure) gold. Rates for 22K, 21K and 18K are calculated from it according to their gold content — 22K contains 91.6% gold, so a tola of 22K today is about Rs 377,284. You can see every karat on our live gold rate page.

What this means when you buy

The Sarafa rate is the price of the metal. A jeweller will add making charges for jewellery, and may deduct a percentage (often called katt) when buying back old gold. So the rate on the board is where the conversation starts, not the final bill. Our gold calculator lets you add making charges and deductions to see the full picture.

Where to check the rate

We update the rate every few minutes from international prices and the exchange rate, and keep a daily history going back more than two years, so you can see how today compares with last week, last month or last year.