Gold Prices Soar to Record Highs in Pakistan
Gold prices in Pakistan have reached an all-time high of Rs268,500 per tola as of Thursday, marking a significant increase from the previous month, according to the Karachi Sarafa Association.
This marks an upward trend driven by global economic policies and market dynamics.
Significant Price Increases
The price of 24-carat gold for 10 grams has also climbed significantly, rising by Rs685 to Rs230,195. This follows a week of escalating gold prices, which have set new records multiple times. Spot gold has risen by 0.5% to $2,588.29 per ounce, while US gold futures increased by 0.2% to $2,615.80 per ounce, highlighting a consistent upward trend.
In addition, the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA) reported a Rs1,700 increase per tola for 24-carat gold, bringing the price to Rs268,000. The cost for 10 grams of gold has risen by Rs1,458 to Rs229,767. This sharp increase follows a volatile week for gold prices, which saw a peak at Rs264,000 per tola on September 11, escalating to Rs265,900 on September 13, and further to Rs266,300 per tola on September 14.
Factors Driving the Surge in Gold Prices
Several factors are contributing to the rising gold prices in Pakistan:
Global Economic Policy:
The Federal Reserve’s recent decision to cut interest rates by 50 basis points has significantly impacted global gold prices. Lower interest rates make gold, which does not yield income, more attractive than other investments.
Economic Uncertainty:
As inflation rates ease, investors often seek refuge in gold to hedge against potential economic instability. The expectation of further rate cuts, with a 65% chance of a 25-bp reduction and a 35% chance of a 50-bp cut at the Fed’s November meeting, bolsters this trend.
Geopolitical Tensions:
Rising geopolitical tensions contribute to the appeal of gold as a safe-haven asset. Investors turn to gold during periods of political and economic uncertainty.
Market Trends:
Market predictions suggest that gold prices could reach between $2,640 and $2,700 per ounce by the end of the year—this forecast, combined with recent fluctuations and record highs, fuels further investment in gold.
Local Market Dynamics
In Pakistan, the price of gold has been fluctuating dramatically over the past week. On Saturday, the local market recorded a rise of Rs400 per tola, reaching Rs266,300. The price for 10 grams also increased by Rs343, now standing at Rs228,309. This surge follows a sharp rise of Rs2,900 on Friday, settling at Rs265,900 per tola. Despite these changes, silver prices have remained stable, with 24-carat silver selling at Rs2,950 per tola and Rs2,529 per 10 grams.
The ongoing rise in gold prices in Pakistan is a reflection of both global economic policies and local market dynamics. The Federal Reserve’s interest rate cut, coupled with geopolitical tensions and market expectations, has driven gold prices to new heights. As investors continue to monitor these factors, gold remains a key asset in financial markets, both globally and locally.
