Gold crashes by over Rs35,000 per tola

Two-way market hits late investors; SBP injects over Rs13tr

KARACHI:

Gold prices in Pakistan suffered a bloodbath on Friday as prices dropped over Rs35,000, mirroring a steep correction in international markets where gold, silver and copper tumbled after touching record highs earlier in the week. The downturn was driven by panic profit-taking as investors rushed to lock in gains amid fading expectations of aggressive US interest rate cuts and a strengthening US dollar.

In the local market, the price of gold per tola plunged by Rs35,500 to settle at Rs537,362, while 10-grams of gold dropped by Rs30,435 to Rs460,701, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association(APGJSA). The sharp fall marked a dramatic reversal from Thursday, when gold surged to Rs572,862 per tola after a massive single-day gain of Rs21,200.

Silver also came under heavy pressure, with prices declining by Rs1,106 to Rs11,069 per tola, reflecting the broader sell-off across precious metals.

International markets witnessed intense volatility as investors booked profits following the recent rally. The US dollar firmed, adding pressure on commodities, after political and monetary signals from Washington dampened expectations of rapid policy easing. The Dollar Index strengthened after US President Donald Trump announced the nomination of former Federal Reserve Governor Kevin Warsh to head the US Federal Reserve, reinforcing expectations of a more cautious monetary stance and reducing bets on aggressive interest rate cuts.

Market analysts said the correction reflects classic two-way market behaviour driven by speculative positioning and fear of missing outleading to exaggerated and disorderly price movements.

Commenting on the situation, Adnan Agar, Director at Interactive Commodities, warned, "The market has entered a dangerous phase of bubble-like behaviour." He noted that international gold recently touched an all-time high near $5,596 before collapsing to $4,940 and is currently trading around $5,050, representing an extraordinary $700 to $800 move within a single day.

He described the volatility as highly unusual, saying it poses serious risks to market stability and investor confidence. "Silver was trading at $121 just 24 hours ago, fell to $93, and is now around $98. A $25 move in silver used to take three to four years; now it's happening in two days," he said.

Agar warned that late entrants have already suffered heavy losses, noting that investors who bought gold near $5,500 saw their positions sharply devalued within 24 hours due to a $500 drop, raising risks of forced liquidations and margin calls.

Looking ahead, he said gold has already gained around $600 since January 1, making the market vulnerable to deeper corrections. He identified $4,900 as a key technical support level, warning that a sustained break below it could trigger further downside.

Meanwhile, the State Bank of Pakistan injected over Rs13 trillion into the banking system through conventional and Shariah-compliant Open Market Operations on January 30, 2026. The Pakistani rupee edged up 0.01% against the US dollar in the inter-bank market, closing at 279.77.