Gold prices in Pakistan are seen remaining high over the next six months, underpinned by a bullish global outlook and sustained safe-haven demand.
The yellow metal extended its record-breaking rally on Thursday and was on track for its best monthly performance since 1973 in the international market, as rising economic and geopolitical uncertainties drove investors to the safe-haven metal, while silver hit a record above $120/oz.
Spot gold was 2.1% higher at $5,514.03 an ounce by 08:52 am ET (1352 GMT), after earlier touching $5,594.82. Gold has gained over 28% so far this month.
The US Federal Reserve left rates unchanged on Wednesday, as investors awaited Trump’s announcement of a replacement for central bank chair Jerome Powell, whose term ends in May. Markets expect the central bank to next trim rates in June.
In Pakistan, gold prices set another record high, with the per tola rate reaching Rs572,862 after a record single-day gain of Rs21,200.
Talking to media, Abdullah Abdul Razzak Chand, President Society Jewellers Welfare Association Tariq Road, said escalating tensions between the US and the European Union over the Greenland issue were a key factor driving the surge in gold prices.
“If geopolitical conditions worsen, the price of the safe-haven asset could cross Rs600,000 per tola,” he said.
Policy Research & Advisory Council’s (PRAC) Head of Research Dr Usama Ehsan Khan told media gold prices closely track international rates but were also affected by currency movements.
“Even a modest global increase can translate into a double-digit rise in local prices if the rupee remains under pressure,” he said.
“The massive surge in price of gold is the result of several reinforcing factors. Globally, geopolitical tensions, concerns about economic slowdown, and expectations of interest-rate cuts in major economies have increased demand for safe-haven assets.
“Historically, gold tends to perform well when real interest rates are low, and current market expectations strongly favor monetary easing”, Khan said.
Arif Habib Commodities CEO Ahsan Mehanti said gold prices had surged to record highs as strong safe-haven demand persisted following President Donald Trump’s threat to impose new tariffs on eight European countries amid his push to acquire Greenland.
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Trump has repeatedly called for US control over Greenland, citing national security concerns related to Russia and China.
Mehanti said gold prices were expected to rise further, driven by their safe-haven appeal, adding that not only were central banks increasing their holdings, but investors were also turning to gold to hedge against escalating geopolitical risks.
Zaki ur Rehman, Chief Business Officer at the Pakistan Mercantile Exchange (PMEX) told media gold prices were likely to remain elevated and volatile over the next six months.
“While short-term corrections are possible, the overall bias remains upward due to global uncertainty, geopolitical risks, and expectations of monetary easing by major central banks.”
Zaki further said rather than focusing on a precise price level, the market should expect range-bound upward movement with higher support levels, indicating sustained investor confidence in gold.
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