Gold touches new record at Rs388,100

Gold prices in Pakistan continued their upward march on Tuesday, extending a record-breaking rally in line with international trends as investors flocked to the safe-haven asset.

According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold per tola surged Rs4,100 to reach an all-time high of Rs388,100. Similarly, the rate of 10-gram gold rose Rs3,514, hitting a new peak at Rs332,733.

On Monday, the precious metal had already reached a record high of Rs384,000 per tola after gaining Rs6,100 in a single day.

Internationally, gold prices continued their record-setting rally as mounting expectations of a September US interest rate cut pressured the dollar and Treasury yields, while investors awaited key US inflation data later in the week.

Spot gold was up 0.7% at $3,661.09 per ounce, as of 0933 am ET (1333 GMT), after hitting a record high of $3,666.38 earlier in the session. US gold futures for December delivery rose 0.7% to $3,701.40.

Market analysts say persistent global uncertainty and policy expectations are likely to keep safe-haven demand for gold elevated in the near term.

Meanwhile, the Pakistani rupee extended its upward streak against the US dollar, posting a slight appreciation in the inter-bank market. The currency closed at 281.61, inching up one paisa from the previous day's close at 281.62. It marked the rupee's 23rd straight session of gains against the greenback.

The rupee has depreciated 1.09% in the calendar year to date and appreciated 0.76% in the fiscal year to date, noted Ismail Iqbal Securities.

In global trade, the US dollar slipped to a nearly seven-week low as investors anticipated data revisions that may reveal a weaker job market, strengthening expectations of deeper interest rate cuts by the US Federal Reserve.

Furthermore, Pakistan's central government debt increased to Rs77.9 trillion by the end of June 2025, up 2.4% month-on-month (Rs1.84 trillion) compared with Rs76 trillion in May 2025, according to the State Bank of Pakistan (SBP) data quoted by Arif Habib Limited.

On a yearly basis, the debt stock grew 13% from Rs68.9 trillion in June 2024. The government's domestic debt rose to Rs54.5 trillion, marking a 15.5% year-on-year increase. Within this, the long-term debt stood at Rs45.7 trillion, led by a sharp 26.1% jump in federal government bonds to Rs41.4 trillion.

The overall permanent debt was Rs42.2 trillion, while the unfunded debt increased 7.9% to Rs3 trillion. Prize bonds edged up to Rs407 billion. Short-term debt, however, declined 14.5% year-on-year to Rs8.8 trillion. Naya Pakistan Certificates also contracted by 26.3% to Rs62 billion.

Meanwhile, the external debt reached Rs23.4 trillion, reflecting a 7.6% increase from Rs21.8 trillion a year earlier and 3.7% higher than May 2025.

Analysts caution that Pakistan's heavy reliance on domestic borrowing through government bonds, coupled with rising external obligations, underscores the fiscal challenge of managing a mounting debt stock amid constrained revenues.