Gold price surges in Pakistan amid market volatility

KARACHI: Gold price in Pakistan witnessed another upward adjustment on Wednesday, reflecting ongoing market pressures and a weakening rupee. 

According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), with an increase of Rs1,000, gold per tola is now priced at Rs273,600.

Similarly, the price of 10 grams of gold has been increased by Rs857, reaching Rs234,568.

This surge comes as local gold rates continue to align with international trends, compounded by inflationary pressures and fluctuating exchange rates.

In the international markert, gold prices were little changed on Tuesday, the last trading day of an eventful year that saw the metal post its best annual performance in more than a decade.

Also Read: Pakistan’s annual inflation slowed to 4.1% in December

Spot gold rose 0.1 per cent at $2,608.09 per ounce, as of 0217 GMT. US gold futures gained 0.1 per cent to $2,620.60.

 “Gold enjoyed a stellar year in 2024 and much of that move higher was predicated on the expected transition towards a lower interest rate environment,” said Tim Waterer, chief market analyst at KCM Trade.

Central bank buying, policy easing and geopolitical tensions propelled bullion to multiple record highs this year, setting the metal on track for its best performance since 2010, with a more than 26 per cent increase year-to-date.

The market now awaits a fresh set of catalysts, including a slew of US economic data due next week that could influence the interest rate outlook for 2025, and President-elect Donald Trump’s tariff policies.

For 2025, “the US interest rate outlook will remain a primary driver of the gold price. Trump’s trade policies will be key in shaping the inflationary picture, the Fed’s interest rate trajectory, and in turn, the gold price,” Waterer said.

Federal Reserve’s policymakers this month cut their 2025 rate forecast to 50 basis points of cuts from 100 bps and Fed Chair Jerome Powell said more reductions now hinge on further progress in lowering inflation.

Bullion is considered a hedge against inflation and turmoil but high rates reduce the non-yielding asset’s appeal.

“Going into 2025, I think the trend is bullish and fundamentals constructive for gold, which I believe ought to challenge record highs again,” said Kyle Rodda, financial market analyst at Capital.com.