Gold reaches $4,670, silver surges as markets react to rising global uncertainty

The prices of gold and silver reached new record highs both globally and locally, driven by rising geopolitical tensions and economic factors, including further cuts in the US Federal Reserve’s interest rates.

On Monday, the price of gold per ounce surged by $75 to a new record high of $4,670 in the international bullion market. This increase follows months of escalating political tensions, particularly in the Middle East, where fears of a potential military escalation involving the United States and Iran have stirred uncertainty.

The market's response to this geopolitical volatility, and the Federal Reserve's decision to continue lowering interest rates, has resulted in a surge in demand for safe-haven assets like gold and silver.

As a result, the price of 24-carat gold per tola in Pakistan saw a significant jump, increasing by Rs 7,500 to reach a historic high of Rs 489,362. Similarly, the price of gold per 10 grams rose by Rs 6,431, setting a new all-time high of Rs 419,549.

In parallel, silver prices also hit record levels. On Monday, the price of silver per tola increased by Rs 300, climbing to Rs 9,782. The price of silver per 10 grams also rose by Rs 257, reaching Rs 8,386, reflecting growing demand for the precious metal as a store of value during times of uncertainty.

Yesterday’s price movements

Yesterday, the price of gold per ounce rose by an additional $50, while silver prices also gained further ground. This sustained increase was largely attributed to market reactions to continued fears of conflict in the Middle East, along with concerns over global inflation and economic instability.

Experts suggest that the Fed's rate cuts have also played a key role in fueling demand for precious metals. As interest rates remain low, investors are seeking alternatives to traditional assets such as bonds, which offer lower returns, thus pushing more capital into gold and silver.

In the local markets, the impact of rising international prices was immediately reflected in the value of gold and silver. The increase in gold prices has prompted heightened demand among investors seeking to secure their wealth amid growing uncertainty. At the same time, silver has gained popularity as a relatively more affordable investment compared to gold, contributing to its price surge.

Despite the market’s strong performance for precious metals, analysts are cautioning that the continued volatility in both the geopolitical and economic landscape could lead to unpredictable price movements in the short term. Market watchers are also paying close attention to any changes in global economic policy or military developments that could further influence commodity prices.