Gold prices surged to unprecedented levels on Monday amid rising global economic and geopolitical uncertainty. In Pakistan, the domestic price of gold hit a new all-time high, with 10-gram gold reaching Rs356,033 and one-tola climbing to Rs415,278 — up by Rs4,629 and Rs5,400 respectively — largely driven by sharp increases in international markets.
According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), international gold prices jumped to a record $3,940 per ounce, gaining $54 in a single day.
International media reports link this rally to several key factors:
- Fears of a potential US government shutdown
- Escalating geopolitical tensions in different regions
- Expectations of further interest rate cuts by the US Federal Reserve
- Ongoing political instability in France and Japan
These developments have prompted investors worldwide to seek the traditional safety of gold.
APSGJA General Secretary Hamza Shikarpuri said domestic jewellery demand has dropped significantly as high prices have made gold unaffordable for many families.
“Most buyers are now bringing in old jewellery and gold bars for exchange rather than purchasing new items,” he noted.
He added that affluent investors, particularly from the real-estate and stock-market sectors, are increasingly turning to gold as a safe investment option. The 10-tola biscuit remains the most popular choice for large investors, while one- to five-tola bars attract small- to medium-scale investors.
Despite the international surge, Mr Shikarpuri claimed that local prices remain undervalued by Rs17,000–18,000 per tola compared to global parity due to subdued domestic demand. He suggested that, if fully aligned with global rates, the local tola price would have exceeded Rs430,000.
The APSGJA official also cited ongoing crackdowns by the Federal Board of Revenue (FBR) and the Federal Investigation Agency (FIA) as factors slowing market activity.
“The FBR appears more focused on extracting higher taxes from gold traders, which is discouraging business in the sector,” he said.
Mr Shikarpuri further indicated that any easing in global tensions could bring a correction in gold prices, but until then, volatility is expected to continue.
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