Gold prices in Pakistan soared past Rs400,000 per tola to a fresh record high on Monday, in tandem with the international rally where the precious metal surged past $3,800 an ounce for the first time. The spike was fueled by investor demand for safe-haven assets amid US rate cut expectations, fears of a potential government shutdown, and rising geopolitical tensions.
In the local market, the gold price per tola jumped by Rs5,900 to settle at Rs403,600, while the 10-gram rate climbed Rs5,058 to Rs346,021, according to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). On Saturday, gold had closed at Rs397,700 per tola after a gain of Rs1,900.
Internationally, spot gold jumped 1.6% to $3,820.96 per ounce by 0932 am ET (1332 GMT), after hitting a record high of $3,831.19 earlier in the session, according to Reuters. US gold futures for December delivery rose 1.1% to $3,850.80.
Interactive Commodities Director Adnan Agar said the international market opened at $3,763 and quickly surged to the high of $3,832 before settling around $3,826.
He explained that the market had been on an exceptional uptrend for seven consecutive weeks. "Almost every week, prices have risen by $100. In September alone, gold opened at $3,446 and has gained nearly $400 by now. Overall, from around $3,300, prices have reached above $3,800 within a short span of time," he noted. Agar stressed that the rally had been unusually steep and uncorrected. "Typically, when gold rises $400-500 in such a short period, the market undergoes a correction of $150-200 before resuming its upward trend. But this time, there has been no correction, which makes the market extremely overbought," he said.
Agar added that while technical indicators already suggested overvaluation of the market, global uncertainties and US economic data were driving a continued bullish momentum. "At this point, smart investors are not entering the market. They are waiting for dips to buy at better levels, while those who already have inventory are selling at record highs to secure profits," he elaborated.
Meanwhile, silver prices also advanced, rising by Rs88 per tola to reach a record high of Rs4,792. The US dollar index fell 0.3% on Monday, making greenback-priced bullion less expensive for overseas buyers.
"Safe-haven demand focused on the potential US government shutdown," which was one of the driving factors behind gold's rally, said David Meger, Director of Metals Trading at High Ridge Futures.
Meanwhile, the Pakistani rupee registered a slight gain against the US dollar, extending its recent stability in the inter-bank market. At the close of trading, the local currency settled at 281.35, appreciating by two paisa, or 0.01%, against the greenback.
During the previous week, the rupee had posted a marginal gain of Rs0.09, or 0.03%, closing at 281.37 compared to 281.46 a week earlier, according to data released by the State Bank of Pakistan.
Ismail Iqbal Securities highlighted that, on a cumulative basis, the rupee had depreciated by 1% in the current calendar year to date, while showing an appreciation of 0.86% in the ongoing fiscal year to date.
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