Gold Prices Soar Beyond Rs300,000 per Tola in Pakistan

Gold prices in Pakistan have reached a historic milestone, exceeding Rs300,000 per tola due to increasing global market rates and heightened demand for safe-haven assets. The ongoing US-China trade war and global economic uncertainty have fueled the surge, pushing gold to record highs both domestically and internationally.

This article explores the factors behind gold’s rising trend, its impact on the Pakistani economy, and the future outlook for investors.

Gold Price Update: Reaching Unprecedented Levels

Historic Surge in Local Gold Prices

On Friday, February 9, 2025, the price of gold in Pakistan increased by Rs1,346 per tola, reaching Rs300,046 for the first time in history. Similarly, the price of 10-gram gold rose by Rs1,154, settling at Rs257,241, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

The rise follows a series of consecutive increases:

• Tuesday: Gold increased by Rs1,900, reaching Rs294,300
• Monday: Gold increased by Rs200, reaching Rs292,400

This rapid escalation indicates strong investor confidence in gold as a safe-haven asset during uncertain economic conditions.

Global Gold Market Trends

Gold prices are not only increasing in Pakistan but also globally. On Friday, spot gold gained 0.5%, reaching $2,871.59 per ounce, marking a sixth consecutive week of gains. Earlier in the session, gold hit a record high of $2,886.62 per ounce.

Key factors driving this increase include:

• US-China Trade War: The escalation of trade tensions has led investors to move towards safe assets like gold.
• US Federal Reserve Policy: Speculation about potential interest rate cuts is further supporting gold prices.
• Chinese Demand: The People’s Bank of China has been increasing its gold reserves, boosting demand.
• Economic Uncertainty: Slowing job creation in the US labor market is creating concerns about economic stability.

Expert Opinions on Gold Price Trends

According to Adnan Agar, Director at Interactive Commodities, “Gold has reached an all-time high today and is expected to remain strong in the future.”

Similarly, Peter Grant, Vice President at Zaner Metals, stated, “Continued purchases by China’s central bank and new policies allowing Chinese insurance funds to invest in gold have further strengthened demand.”

Bart Melek, Head of Commodity Strategies at TD Securities, believes that uncertainty in global markets and inflation trends will keep gold prices high in the foreseeable future.

Trade War Impact on Gold Prices

US-China Trade Tensions and Its Effect on Gold

The recent trade war escalation between the United States and China has significantly impacted gold prices. The US administration imposed new tariffs on Chinese goods, triggering uncertainty in global financial markets.

Gold is traditionally considered a safe investment during economic and political instability, causing demand to surge. With investors seeking protection from market volatility, the demand for gold continues to rise.

US Economic Indicators and Federal Reserve Policy

The latest US labor department report showed:

• 143,000 jobs were added in January (below the expected 170,000)
• The unemployment rate remained at 4%, slightly better than the expected 4.1%

While job growth has slowed, wage growth is stable, leading to uncertainty about the Federal Reserve’s next move on interest rates. If the Federal Reserve lowers interest rates, it could further boost gold prices.

China’s Role in the Gold Market

China, the world’s largest consumer of gold, has been aggressively increasing its gold reserves. Additionally, China’s new policy allowing insurance funds to invest in gold has fueled the recent price surge.

This trend suggests that gold will remain a strong asset for investors, particularly in emerging markets.

Impact of Gold Price Hike on Pakistan

Rising Gold Prices and Inflation in Pakistan

The record-breaking increase in gold prices is affecting multiple sectors in Pakistan’s economy.

1. Jewelry Industry

With gold prices reaching unprecedented levels, demand for gold jewelry has declined, especially among middle-class consumers. Jewelers report that customers are postponing purchases, waiting for a possible price correction.

2. Investor Behavior

Gold is becoming an attractive investment option. Investors, particularly in Pakistan’s real estate and stock markets, are shifting funds towards gold as a safe-haven asset.

3. Import Costs and Trade Deficit

Since Pakistan imports a significant portion of its gold, the rising international prices increase the country’s trade deficit. Higher gold prices also contribute to inflationary pressures.

Pakistani Rupee and Its Relation to Gold Prices

Rupee Gains Slightly Against US Dollar

Despite rising gold prices, the Pakistani rupee showed slight appreciation against the US dollar in the inter-bank market on Friday. The rupee gained 0.04%, strengthening by 10 paisa to 279.05 per dollar.

Why Is the Rupee Strengthening?

• Improved Foreign Exchange Reserves – The State Bank of Pakistan (SBP) has successfully increased forex reserves, supporting the rupee.
• Stable Monetary Policies – The SBP’s cautious approach is helping maintain currency stability.
• Lower Import Demand – The increase in gold prices has reduced demand, leading to fewer imports and supporting the rupee.

Future Outlook: Will Gold Prices Continue Rising?

Short-Term Forecast

Analysts predict that gold prices will remain high in the short term due to:

• Unresolved trade disputes between the US and China
• Federal Reserve’s potential interest rate cuts
• Continued Chinese gold purchases

Long-Term Outlook

In the long run, gold prices will depend on:

• Global economic recovery post-trade war
• Inflation trends and central bank policies
• Geopolitical stability

If global uncertainty persists, gold could see new record highs. However, if the US-China tensions ease, prices may stabilize.old could see new record highs. However, if the US-China tensions ease, prices may stabilize.

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FAQs About Gold Prices in Pakistan

1. Why are gold prices rising in Pakistan?

Gold prices are increasing due to rising global demand, economic uncertainty, and trade war tensions between the US and China.

2. Is it a good time to invest in gold?

Yes, gold remains a safe-haven asset. However, prices are already at record highs, so investors should watch market trends before making decisions.

3. How does the Pakistani rupee affect gold prices?

A weaker rupee makes gold more expensive in Pakistan since gold is imported. However, the rupee has recently strengthened, slowing down price increases.

4. Will gold prices continue to rise in 2025?

Analysts predict that gold prices will remain strong due to global economic uncertainty and central bank policies.

5. How can I check daily gold prices in Pakistan?

Gold prices are updated daily by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA) and financial news sources.

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Conclusion

Gold prices in Pakistan and globally have reached record highs, surpassing Rs300,000 per tola due to economic uncertainty and safe-haven demand. With rising global tensions, investor interest, and inflation concerns, gold remains a valuable asset for investors. However, market trends should be closely monitored before making investment decisions.