Gold prices in Pakistan reached another record high on Monday, with 24-karat gold being sold at Rs282,300 per tola, a Rs500 increase from the previous session. The rise mirrors global trends, where spot gold surged to an all-time high near $2,728 per ounce, supported by safe-haven demand amid escalating conflicts in the Middle East and uncertainty surrounding the US presidential election.
Global Gold Market and Local Impact
Globally, gold has risen by over 32% this year, surpassing the 31% gain in 2007, marking its largest yearly increase since 1979, when prices surged 127%. In Pakistan, gold has seen a notable increase of Rs62,300 per tola, representing a 28% rise year-to-date.
The Karachi Sarafa Association also reported that the price of 24-karat gold per 10 grams climbed to Rs242,027, reflecting a Rs429 increase. Meanwhile, the price of 22-karat gold reached Rs221,858 per 10 grams.
Silver Also Sees Gains
Silver prices have similarly surged to their highest levels since 2012, both globally and locally. In Pakistan, 24-karat silver is now being sold at Rs3,150 per tola, up Rs470 this year, marking a 17.5% increase. The price of silver per 10 grams stands at Rs2,701.
Safe-Haven Demand Amid Geopolitical Risks
Gold’s recent ascent has been bolstered by growing geopolitical tensions in the Middle East, particularly the escalating conflict between Israel and Iran. Israel’s ongoing military operations in Gaza and Lebanon, along with increasing threats from Hezbollah and a missile attack on Israeli Prime Minister Netanyahu’s residence, have raised fears of a broader regional war. These tensions, coupled with a tight US election race between Donald Trump and Kamala Harris, have heightened investor anxiety, leading to increased demand for gold as a safe haven.
Interest Rate Outlook and Impact on Gold
In addition to geopolitical risks, the easing monetary policy environment has played a significant role in gold’s surge. Investors are betting on further interest rate cuts by major central banks, including the Federal Reserve, which is expected to continue its rate-cutting cycle. A lower interest rate environment typically weakens the US dollar, making gold more attractive as it becomes cheaper for buyers holding other currencies.
Technical Analysis: What’s Next for Gold?
From a technical perspective, gold’s sustained strength above $2,700 per ounce has set the stage for further bullish movement. However, analysts caution that the market may need a period of consolidation, as the daily Relative Strength Index (RSI) indicates slightly overbought conditions. Key support levels are pegged at $2,662 and $2,630, while resistance lies near the recent highs, suggesting that any significant pullback could be limited.
As investors continue to monitor developments in both geopolitical and economic fronts, gold is poised to remain a focal point in the markets for the foreseeable future.
