Investment shock: gold and silver prices plummet globally and in Pakistan

Gold and silver prices experienced a sharp decline on Friday, both in Pakistan and in global markets, causing widespread concern among investors and analysts.

In Pakistan, the price of gold fell dramatically by Rs 35,500 per tola, reaching Rs 537,362, while 10 grams of gold were sold for Rs 460,701, down Rs 30,435, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

Silver also saw a significant drop, decreasing by Rs 11,069 per tola to Rs 1,106. On Thursday, gold had climbed to Rs 572,862 per tola after a gain of Rs 21,200, highlighting the sudden volatility.

The decline mirrored trends in international markets, where gold prices fell more than 4 per cent amid speculation that the US Federal Reserve could adopt a more hawkish stance. Spot gold dropped 3.9 per cent to $5,183.21 per ounce, while US gold futures for February delivery fell 2.7 per cent to $5,176.40 per ounce. Silver tumbled even more sharply, losing over 8 per cent in value, erasing more than $3 trillion in combined market capitalisation in just minutes.

Experts attribute the sudden downturn to several factors, including profit-taking by investors after historic gains, speculative trading, economic uncertainty, and geopolitical tensions. Analysts also point to the relatively small size of precious metals markets, which can amplify price swings, as well as rising interest in cryptocurrencies and exchange-traded funds, which may have diverted investment away from traditional assets like gold and silver.

Despite the steep intraday losses, gold had already seen a strong performance in January, rising over 20 per cent and on track for its largest monthly gain since 1980. While the market remains volatile, analysts say such fluctuations are not uncommon after sharp rallies, and caution investors to be prepared for further swings.