Trade War Fuels Gold Prices to a Near 3-Month High
Gold Prices Surge by Rs4,250, Reaching Rs287,450 per Tola; Rupee Shows Minor Decline
By Usman Hanif
January 23, 2025
Gold prices in Pakistan have soared to their highest level in nearly three months, reflecting the impact of rising international gold rates amid ongoing trade wars and heightened market volatility. The surge is further amplified by uncertainties following the re-election of US President Donald Trump, fueling investor demand for safe-haven assets.
Gold Prices Skyrocket in Pakistan
Local Market Highlights
The price of gold in Pakistan climbed by a significant Rs4,250 per tola, reaching Rs287,450, as reported by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). Similarly, the price of 10-gram gold saw an increase of Rs3,642, settling at Rs246,440.
On the preceding day, Tuesday, gold prices had already risen by Rs300 to Rs283,200 per tola. The record high for gold in Pakistan was Rs287,900 per tola on October 30, 2024, indicating that current levels are approaching these historic highs.
International Market Trends
Globally, gold prices also saw significant gains, reaching $2,751 per ounce (including a $20 premium) with an intraday increase of $40. This marks the highest levels for gold prices in three months.
According to Abdullah Abdul Razzaq, a member of the APGJSA, “Gold prices are rebounding to their highest point and may surpass it soon.”
The Global Gold Market: Key Factors Driving Prices
1. Trade Wars and Market Uncertainty
The international gold market is witnessing heightened demand due to concerns over potential trade wars triggered by US President Trump’s proposed policies. Investors are flocking to gold as a safe-haven asset amid fears of global market instability.
2. A Soft Dollar
The dollar index dipped to a three-week low, making gold more affordable for international buyers. As a result, gold prices have strengthened globally.
3. Absence of Key Economic Data
The lack of significant economic data from the United States has provided an uninterrupted upward momentum for gold prices. However, new developments expected in the coming weeks could influence the market.
Expert Predictions for Gold Prices
Bullish Sentiment Prevails
Adnan Agar, Director of Interactive Commodities, noted that gold prices reached a high of $2,763 and a low of $2,741 on Wednesday, closing at $2,751 per ounce. Agar predicts a continued bullish trend, with prices potentially reaching between $2,780 and $2,790 per ounce.
However, he also cautioned that a correction might occur after hitting these levels, suggesting that investors remain vigilant.
Safe-Haven Demand
“Uncertainty over tariffs and other policies typically boosts gold, as it’s a safe haven in volatile markets,” said Ryan McIntyre, Senior Portfolio Manager at Sprott Asset Management.
Spot gold prices increased by 0.3%, trading at $2,753.79 per ounce as of 1445 GMT, while US gold futures gained 0.2%, settling at $2,764.80.
Impact on the Pakistani Rupee
Minimal Depreciation
The Pakistani rupee experienced minor depreciation against the US dollar in the inter-bank market, losing 3 paisas or 0.01% to settle at 278.85. On Tuesday, the rupee had closed at 278.82.
Stable Trading Environment
Despite the fluctuations in gold prices, the rupee displayed relative stability, with minimal changes in its value during the day.
FAQs
1. Why are gold prices rising in Pakistan?
Gold prices in Pakistan are increasing due to rising international rates, driven by trade wars, a weaker US dollar, and investor demand for safe-haven assets amid market uncertainty.
2. What is the current price of gold in Pakistan?
As of January 23, 2025, the price of gold per tola in Pakistan is Rs287,450, and the price of 10-gram gold is Rs246,440.
3. How does the global market influence local gold prices?
Local gold prices in Pakistan are directly affected by international rates. Changes in the global gold market, dollar value, and geopolitical uncertainties significantly impact domestic pricing.
4. What are the expert predictions for gold prices?
Experts predict that gold prices may rise further, potentially reaching $2,780 to $2,790 per ounce globally, though a correction could occur after these levels are reached.
5. How has the Pakistani rupee performed against the US dollar?
The Pakistani rupee has shown minimal fluctuation, depreciating slightly by 3 paisas to settle at 278.85 against the US dollar.
