Trade war lifts gold prices to near 3-month high

Hit Rs4,250 reaching Rs287,450/tola; rupee loses 3 paisa depreciates to 278.85/$

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KARACHI:

Gold prices in Pakistan experienced their steepest increase in nearly three months on Wednesday, reflecting rising international gold rates driven by trade wars and heightened market volatility following the election of US President Donald Trump.

In the local market, the price of gold per tola surged by Rs4,250 to reach Rs287,450. Similarly, the price of 10-gram gold rose by Rs3,642, bringing it to Rs246,440, as reported by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). On Tuesday, gold prices had already increased by Rs300, settling at Rs283,200 per tola.

Internationally, gold prices also climbed, with the rate reaching $2,751 per ounce (including a $20 premium), marking a $40 increase during the day. The highest local gold price on record was Rs287,900 per tola on October 30, 2024, while the international price stood at $2,784, according to Abdullah Abdul Razzaq, a member of the APGJSA. "Gold prices are rebounding to their highest point and may surpass it soon," he remarked.

Adnan Agar, Director of Interactive Commodities, noted the ongoing upward momentum in the gold market. He observed that gold reached a high of $2,763 and a low of $2,741 on Wednesday, closing at $2,751. Agar expects the market to remain bullish, with potential prices between $2,780 and $2,790, though he cautioned about possible corrections after hitting these levels.

He also highlighted the lack of significant economic data from the United States currently influencing the market, while new developments are expected next week. He pointed out that unpredictable statements or actions by President Trump could affect market movements but maintained his forecast of rising gold prices in the near term.

Globally, gold prices neared three-month highs on Wednesday, supported by a soft dollar and uncertainties surrounding Trump's proposed policy plans, which have fuelled concerns over trade wars and market instability. Spot gold rose by 0.3% to $2,753.79 per ounce as of 1445 GMT, trading below its all-time high of $2,790.15 recorded on October 31. US gold futures also gained 0.2%, reaching $2,764.80.

The dollar index dipped to a three-week low, making gold more affordable for holders of other currencies. "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.

Meanwhile, the Pakistani rupee showed minimal fluctuation against the US dollar, depreciating by 0.01% in the inter-bank market to settle at 278.85 by the end of the day, as reported by the State Bank of Pakistan. As per the central bank, the currency had closed at 278.82 on Tuesday.

Globally, the US dollar edged slightly lower amid indecisive trading and uncertainty.