Gold prices in Pakistan continued their upward momentum, touching new highs on Thursday, while mirroring the rise in international markets.
In the local market, the price of gold per tola rose Rs1,000 to an all-time high of Rs309,000, while 10-gram gold rose Rs857 to settle at Rs264,917, according to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). The increase follows a Rs3,800 jump per tola on Wednesday, which had already pushed prices to a record high.
On the global front, the gold rate also saw an uptick, rising $9 to $2,953 per ounce, including a $20 premium, as per the APSGJA.
Analysts point to several factors that are fueling this trend. A weaker US dollar, influenced by the increasing use of alternative currencies like the Chinese yuan in oil trade and the ongoing US-led trade tensions, has enhanced gold's appeal as a hedge against currency depreciation.
Additionally, rising inflation, driven by expanding money supply and supply chain disruptions, has prompted investors to seek the stability of gold as a safe-haven asset. Geopolitical instability, particularly the US-China trade war, further contributes to the surge in gold demand as uncertainty typically strengthens bullion's position as a risk-averse investment.
With gold prices reaching record highs both globally and locally, market experts anticipate a potential short-term correction once prices approach $3,100 per ounce. However, the overall trajectory remains bullish, driven by macroeconomic trends and investor sentiment favouring bullion as a store of value.
Meanwhile, the Pakistani rupee remained largely unchanged against the US dollar in the inter-bank market. By the end of trading, the rupee settled at 279.46, marking a marginal increase of one paisa compared to its previous close of 279.47 on Wednesday.
On the global front, the Japanese yen strengthened, while the US dollar remained stable as investors assessed the potential impact of US President Donald Trump's latest tariff policies on the global economy and their influence on major central banks' interest rate decisions.
Meanwhile, geopolitical concerns escalated following Trump's remarks referring to Ukrainian President Volodymyr Zelenskiy as a "dictator", amid ongoing diplomatic efforts to resolve the Russia-Ukraine conflict.
On Thursday, the State Bank of Pakistan (SBP) announced that its foreign currency reserves increased $35 million to $11.2 billion, while commercial banks held $4.75 billion in net reserves.
Furthermore, the government revised rates of return on the conventional Naya Pakistan Certificates (NPCs) in a broad-based reduction across all tenors and currencies, according to Arif Habib Limited.
Rupee-denominated NPCs saw the most significant decline, with cuts ranging from 250 to 850 basis points (bps), bringing the 12-month rate down by 850 bps to 13%.
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