Gold prices surged to record highs in both domestic and international markets on Monday, driven by escalating global tensions and weakening currencies. In Pakistan, the price of gold per tola jumped by Rs8,100, reaching an all-time high of Rs357,800, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).
This comes after prices remained unchanged on Saturday at Rs349,700 per tola. However, a few days ago, gold had touched the mark of Rs350,000 per tola.
International prices of gold for Pakistan continued their upward trajectory, with global rates touching $3,395 per ounce. This marks a daily gain of $69.
APGJSA President Muhammad Qasim Shikarpuri attributed the rally to "intensifying economic tensions" between the United States and China.
Gold has reached new heights, both locally and globally, he said. The current standoff between the US and China has left neither side willing to compromise, as retreating would be economically disastrous for both, he said.
He warned that if the situation continues, it could trigger a global financial crisis. "The pace at which gold is rising, driven by tariff-related tensions, is causing currencies worldwide to depreciate," Shikarpuri added.
He further cautioned that Pakistan's own exchange rate could become unsustainable if the gold price continues its upward march. "If gold hits Rs450,000 per tola as expected within this month, managing the exchange rate will become increasingly difficult. A sudden spike in the rupee-dollar rate is a real possibility." While a brief correction in gold prices may occur, Shikarpuri believes it will not signal a downturn but rather a pause before another rally. "Unless the US and China engage in meaningful negotiations, gold prices are likely to climb further," he said.
Domestically, the market is also grappling with a supply crunch. "Investor demand for gold remains strong, but the physical supply is limited. Buyers are active, but sellers are absent," he noted. In such a scenario, if international prices do not ease, domestic prices will continue their ascent. He advised investors against selling their gold holdings, citing strong local demand and tight supply. Internationally, gold surged above $3,400 to a record high on Monday, as the dollar weakened and uncertainty over the economic impact of US-China trade tensions spurred demand for safe-haven bullion. Spot gold rose 2.6% to $3,415.24 an ounce at 1446 GMT. Prices hit a record high of $3,424.25 earlier in the session. US gold futures rose 3% to $3,426.30.
The dollar tumbled as investor confidence in the US economy took another hit over President Donald Trump's comments about Federal Reserve Chairman Jerome Powell. A weaker dollar makes bullion more appealing for other currency holders. Meanwhile, the Pakistani rupee recorded a slight dip against the US dollar on Monday, slipping by 0.05% in the inter-bank market. By the close of trading, the local currency stood at 280.87 against the greenback, reflecting a decline of 15 paisas from Friday's closing rate of 280.72.
Meanwhile, the US dollar weakened globally as investor sentiment took a hit following concerns over Trump's intentions to reshape the Federal Reservea move that could raise questions about the central bank's independence.
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