Gold touches new record high near Rs400,000 per tola in Pakistan

KARACHI: Gold prices in Pakistan once again climbed to a fresh record high on Tuesday, mirroring the global rally as investors worldwide sought safe haven assets amid expectations of further US interest rate cuts.

According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of 24-karat gold per tola rose by Rs5,100 in a single day to reach Rs398,800, marking a historic high for the local market. Similarly, the price of 10 grammes of gold surged by Rs4,372, settling at Rs341,906.

Just a day earlier, the price per tola had touched Rs393,700 after gaining Rs3,400, showing how quickly the precious metal has been scaling new heights this month.

The international market also provided strong support for the rally. Gold was recorded at $3,770 per ounce (with a $20 premium), reflecting an increase of $51 in a single day. Meanwhile, silver also joined the upward trend, with its price rising by Rs42 per tola to reach Rs4,637.

International market influence

In the global market, spot gold hovered at $3,743.39 per ounce during Asian trade after hitting an all-time high of $3,759.02 earlier in the day. US gold futures for December delivery inched higher by 0.1 percent to $3,779.50. Later in European hours, spot gold extended gains, climbing to $3,769.48 per ounce, while US futures touched $3,801.70.

Analysts noted that expectations of more rate cuts by the US Federal Reserve have created a favourable environment for gold. Non-yielding assets like gold generally thrive when interest rates fall, as lower returns on bonds and savings make the precious metal more attractive.

Newly appointed Fed Governor Stephen Miran sparked debate on Monday by calling for aggressive rate cuts, warning that the central bank’s current stance risks putting the job market under pressure. His view, however, was challenged by three other policymakers who urged caution, pointing to lingering inflation risks.

“Markets are leaning towards a dovish outlook,” said independent analyst Ross Norman. “Miran’s comments have heightened expectations of deeper cuts, which is a gold-positive outcome.”

Data from the CME FedWatch tool shows investors pricing in two 25-basis-point cuts, one expected in October and another in December, with probabilities of 90 percent and 73 percent respectively.

Norman added that institutional demand for gold is also picking up, as investors appear to be rotating out of equities while stock markets hover near peaks. Strong seasonal demand from India has added further momentum.

How gold has fared in September

September has turned out to be a historic month for gold in Pakistan, with the yellow metal shattering record after record. At the start of the month, gold per tola was priced at Rs370,700 on September 1, already considered an all-time high at the time.

By September 3, the price had surged to Rs376,700, followed by Rs384,000 on September 8. The rally did not slow, with prices hitting Rs388,100 on September 9 and Rs391,000 on September 16. Though the market saw small corrections on September 11, 13, and 17, the overall trend remained upward.

On September 20, gold rose to Rs390,300, and by September 22, it had soared to Rs393,700. Tuesday’s record of Rs398,800 per tola shows that within just three weeks, gold has gained more than Rs28,000 per tola.

With global investors keeping a close eye on Federal Reserve Chair Jerome Powell’s upcoming speech, traders believe volatility will persist. If Powell signals more aggressive rate cuts, gold could continue to break new records in the weeks ahead.

For now, Pakistan’s gold market remains firmly in uncharted territory, with Rs400,000 per tola just around the corner.