Gold prices surged to historic highs on Monday, shaking both domestic and international markets. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold in Pakistan soared by Rs. 8,100 per tola, catapulting it to an all-time high of Rs. 357,800.
The price of 10 grams of gold experienced a dramatic jump of Rs. 6,944, bringing it to Rs. 306,755. The global gold rate also followed suit, climbing by $69 in just a single day to reach $3,395 per ounce, inclusive of a $20 premium.
Factors Driving the Surge in Gold Prices
As global markets grapple with economic volatility, investors are flocking to gold as a safe-haven asset. The rapid rise in gold prices is a direct reflection of growing investor concern regarding:
- Persistently high inflation rates
- Rising geopolitical tensions
- Currency devaluations
- Interest rate speculations
These factors have led investors to diversify portfolios, shifting focus toward precious metals. Gold’s intrinsic value and historical resilience during crises make it a go-to choice in times of market turbulence.
The Pakistani Rupee’s depreciation against the US Dollar has significantly contributed to the skyrocketing domestic gold prices. As the value of the Rupee falls, imported goods, including gold, become more expensive.
The recent bullish trend is also fueled by speculative trading and increased institutional interest. Major global financial institutions are increasing their gold holdings, anticipating further instability.
Domestic Gold Market Trends in Pakistan
From Karachi to Lahore and Islamabad, gold prices hit record-breaking levels. Market dealers reported a sharp spike in buying activity, especially among long-term investors and wedding season buyers.
The surge in prices has strained the supply chain, with wholesalers facing stock shortages due to panic buying. At the same time, goldsmiths and jewellers are adjusting their business strategies, focusing more on customized orders and lightweight designs to accommodate price-sensitive consumers.
- Sluggish GDP growth in leading economies
- Stalling interest rate cuts by central banks
- Volatile stock markets
- Ongoing conflicts in Eastern Europe and the Middle East
Several central banks, particularly in Asia and the Middle East, have ramped up their gold reserves, reflecting a strategic shift away from fiat currencies.
The Ripple Effect on Other Precious Metals
While gold dominates the headlines, the ripple effect is being felt across other precious metals:
- Silver rose by Rs. 150 per tola, reaching Rs. 2,750 in Pakistan.
- Platinum saw a moderate gain in global markets, as investors diversify within the precious metals segment.
- Palladium experienced slight volatility, with prices fluctuating due to demand uncertainty in the automotive sector.
Market analysts caution that short-term corrections may occur as some investors engage in profit-taking.
- Global inflation remains unchecked
- Geopolitical risks intensify
- Interest rates remain static or decline
Economists and financial strategists agree that the gold price long-term outlook for gold remains bullish. The consistent increase in institutional buying and central bank acquisitions indicates sustained demand, likely to support elevated price levels for months to come.
