Gold prices in Pakistan surged to an unprecedented level on Wednesday, breaking past Rs551,500 per tola, as international bullion markets witnessed a powerful rally that pushed gold beyond $5,300 per ounce for the first time in history.

The sharp rise was fueled by growing global economic uncertainty, a softer US dollar, and mounting investor anxiety over the future independence of the US Federal Reserve ahead of its key policy announcement.

According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola climbed by Rs21,100, reaching Rs551,662 in the local market. Meanwhile, the price of 10 grams of gold increased by Rs18,090 to Rs472,961. This surge followed a brief dip a day earlier when gold prices had fallen by Rs1,500 per tola.

Silver prices also made headlines, hitting a historic peak in Pakistan. The price of silver per tola jumped by Rs271 to Rs11,911, marking its highest-ever level in the domestic market.

On the global front, gold touched a new record high of $5,311.31 per ounce, while spot gold was trading around $5,278.28 per ounce, up nearly 1.7% by late afternoon GMT, according to Reuters. The rally extended gains of over 3% recorded in the previous session, as investors rushed toward safe-haven assets amid rising geopolitical and macroeconomic risks.

Market sentiment remains cautious ahead of the US Federal Reserve’s policy decision, scheduled for later today, as concerns deepen over political influence and the direction of US monetary policy.

Adnan Agar, Director at Interactive Commodities, described the current phase as a period of price discovery for gold. He noted that prices opened near $5,156, which effectively became the session’s low, before rallying sharply above $5,300, signalling strong bullish momentum.

He added that while interest rates are widely expected to remain unchanged, the Fed’s forward guidance will be closely watched. Agar pointed out that the current Fed chairman’s term is nearing its end, and expectations of a new leadership, potentially aligned with former President Donald Trump, have raised speculation about aggressive rate cuts. Such a shift could further weaken US monetary policy and provide additional support to gold prices.

Commenting on silver, Agar said that trading of silver contracts on the Pakistan Mercantile Exchange (PMEX) will stay suspended due to extreme price volatility. Silver has been experiencing daily price swings of $8 to $12, translating into fluctuations of 10–15%, which poses significant risk for a relatively small market like Pakistan.

He added that major global exchanges, including the Shanghai Metal Exchange and the Chicago Mercantile Exchange, have already taken precautionary measures by limiting positions or increasing margin requirements. PMEX’s decision to halt trading aims to safeguard investors, with trading expected to resume only once market conditions stabilize.

Analysts maintain a bullish outlook for gold, supported by continued central bank buying, safe-haven demand during geopolitical tensions, currency weakness, and buying interest on price dips, despite signs that the market is technically overbought.

 
Credit: Independent News Pakistan (INP)