Greenland row lifts gold to record

Safe-haven rush pushes metal to Rs493,662/tola as Trump tariff warning rattles markets

KARACHI:

Gold prices in Pakistan surged to fresh all-time highs on Tuesday, mirroring a strong rally in the international market as investors flocked to safe-haven assets after US President Donald Trump warned of additional tariffs on some European countries amid a dispute over Greenland.

In the local market, the price of gold per tola rose by Rs4,300 to settle at a new record of Rs493,662. Likewise, the price of 10-gram gold increased by Rs3,686 to Rs423,235, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association.

The rally followed an already strong session on Monday, when gold per tola had climbed by Rs7,500 to Rs489,362.

Silver prices also moved sharply higher, with per-tola rates rising by Rs87 to Rs9,869. Internationally, spot gold jumped 1.7% to $4,672.49 an ounce by 1705 GMT, after hitting a record intra-day peak of $4,689.39. Silver also touched a historic high of $94.61 an ounce, while the US dollar weakened amid escalating trade war concerns. Commenting on market dynamics, Adnan Agar, Director at Interactive Commodities, said gold has been trading in a wide but elevated range. The high was around $4,750 per ounce, the low was near $4,650, and it was later trading close to $4,738. "Since Trump reignited the Greenland issue over the weekend, gold has been moving up as soon as markets opened," he noted.

However, Agar cautioned that the pace of the rally appears "unusually fast." "There is talk in the market of gold heading towards $5,000 or even $5,500 this year, but everything seems to be happening too early," he said, pointing to silver's nearly 40% rise in just 20 days. "Such moves don't look healthy or sustainable."

He highlighted that last year gold delivered returns of around 65-70%, while silver surged nearly 140% over the full year. "This time, similar or even stronger returns are being compressed into weeks, which raises concerns," Agar said.

According to him, global exchanges, particularly in silver, have begun imposing position limits to curb excessive speculation. "Our exchange is doing this, and so is the Shanghai exchange. They are trying to prevent traders from getting stuck at extreme levels," he explained.

Meanwhile, the State Bank of Pakistan injected around Rs50 billion through a three-day reverse repo Open Market Operation (OMO) on Tuesday. It accepted the full Rs50.5 billion face value at a uniform rate of 10.51% per annum, with bids ranging between 10.60% and 10.51%.

The Pakistani rupee edged up against the US dollar in the inter-bank market, closing at 279.91 compared to 279.92 a day earlier.