Gold Prices Soar in Pakistan as Global Market Hits New Highs
Introduction
Gold prices in Pakistan have surged once again, following a strong upward trend in international markets. On Tuesday, the per tola price of gold increased by Rs1,900, reaching Rs294,300, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). This continues the bullish momentum observed on Monday when gold had already reached a record high of Rs292,400 per tola.
The international gold market also saw a significant jump, with prices hitting an all-time high of $2,840 per ounce before settling at $2,828. Analysts suggest that the surge is fueled by economic uncertainty, a weaker US dollar, and investor demand for safe-haven assets.
In addition to gold price movements, the Pakistani rupee appreciated slightly, gaining 8 paisas against the US dollar, while the government successfully raised Rs544.63 billion through Treasury Bills (T-Bills) and Government of Pakistan Ijarah Sukuk (GIS) auctions.
This article will delve into:
- The factors behind the rising gold prices
- The impact on investors and traders
- Fluctuations in the Pakistani rupee
- Government borrowing trends through T-Bills and Sukuk
Gold Prices Skyrocket: Breaking Records Again
Gold Prices in the Local Market
Gold prices in Pakistan continue to set new records. On Tuesday, February 4, 2025, the price of one tola of gold jumped by Rs1,900, reaching Rs294,300. This increase followed Monday’s rise of Rs200, which had already set a historic peak at Rs292,400 per tola.
According to APGJSA, the latest price hike is a reflection of international gold market trends, where gold surged past $2,815 per ounce, including a $20 premium.
Recent Gold Price Movements in Pakistan
| Date | Gold Price (Per Tola) | Change (Rs) |
|---|---|---|
| February 4, 2025 | Rs294,300 | +1,900 |
| February 3, 2025 | Rs292,400 | +200 |
| February 2, 2025 | Rs292,200 | +300 |
Global Gold Market Trends
On the international front, gold prices are experiencing an upward trend, with Adnan Agar, Director of Interactive Commodities, stating that the market hit an all-time high of $2,840 per ounce before settling around $2,828. The lowest recorded price of the day was $2,807 per ounce.
Key Factors Behind the Gold Price Surge
- Weaker US Dollar: A decline in the value of the US dollar by 0.5% made gold cheaper for investors holding other currencies, boosting demand.
- Safe-Haven Demand: With global economic uncertainties, gold remains a top choice for investors seeking a stable asset.
- Strong Market Momentum: Analysts predict gold could test the $2,850-$2,860 range before facing potential corrections.
- Upcoming Economic Data: The US employment data report set for Friday could influence further price fluctuations.
Pakistani Rupee Gains Against US Dollar
Interbank Market Movement
While gold prices surged, the Pakistani rupee showed slight improvement, gaining 8 paisas against the US dollar on Tuesday.
- Closing Rate: 278.96
- Previous Rate: 279.04
- Appreciation: 0.03%
According to the State Bank of Pakistan (SBP), the rupee’s stability can be attributed to:
- Improved foreign exchange reserves
- Higher remittances
- Government policies aimed at controlling inflation
The rupee’s performance against the dollar is a crucial factor for the import-export sector, impacting gold imports, fuel prices, and overall inflation levels in the country.
Government Raises Rs544.63 Billion Through T-Bills and Sukuk
T-Bills Auction Results
The State Bank of Pakistan (SBP) raised a total of Rs452 billion through its latest Treasury Bills (T-Bills) auction, exceeding the target of Rs450 billion. The market saw total bids amounting to Rs918 billion, highlighting strong investor interest.
T-Bill Yield Changes
| Tenure | Previous Yield (%) | New Yield (%) | Change (bps) |
|---|---|---|---|
| 3-Month | 11.5898% | 11.7998% | +21 |
| 6-Month | 11.4048% | 11.5048% | +10 |
| 12-Month | 11.3898% | 11.5898% | +20 |
The rise in cut-off yields indicates that investors expect higher interest rates, leading to greater returns on government securities.
Ijarah Sukuk Auction Results
The 18th auction of Government of Pakistan Ijarah Sukuk (GIS) raised Rs92.63 billion for the Ministry of Finance.
- Total Bids Received: Rs256.62 billion
- Accepted Bids: Rs92.63 billion
- Fixed Rental Rates:
- 3-Year Sukuk: 11.4990%
- 5-Year Sukuk: 11.9900%
- Variable Rental Rates:
- 3-Year Sukuk: 11.1001% (-0.79% from the reference rate)
- 5-Year Sukuk: 11.2301% (-0.66% from the reference rate)
Notably, no bids were received for the 10-year Sukuk, reflecting investor hesitancy toward long-term commitments.
Frequently Asked Questions (FAQs)
1. Why are gold prices rising in Pakistan?
Gold prices in Pakistan are rising due to international market trends, a weak US dollar, and increased investor demand for safe-haven assets.
2. Will gold prices continue to rise?
Experts predict that gold could touch $2,850-$2,860 per ounce before facing a possible correction. However, macroeconomic factors will determine the long-term trend.
3. How does the rupee’s performance affect gold prices?
A strong rupee makes gold imports cheaper, while a weaker rupee increases gold prices in Pakistan due to higher import costs.
4. What are Treasury Bills (T-Bills) and how do they impact the economy?
T-Bills are short-term government securities used to raise funds for government spending. Higher T-Bill yields suggest higher returns for investors but can also lead to higher borrowing costs.
5. Why did no bids come for the 10-year GIS Sukuk?
Investors avoided the 10-year Sukuk due to uncertainty in long-term economic conditions and fluctuating interest rates.
Conclusion
Gold prices in Pakistan and globally continue to rise, driven by economic uncertainty and investor sentiment. While gold remains a strong investment option, analysts warn of potential corrections in the near future.
Meanwhile, the Pakistani rupee’s stability and government borrowing trends through T-Bills and Sukuk indicate a complex financial landscape for investors and policymakers alike.
