Record-breaking gold prices observed in Pakistan due to escalating global rates
In a remarkable turn of events, the prices of gold and silver have surged in Pakistan's local market. On Monday, gold per 10 grams reached a record-breaking high of Rs317,815, marking a significant increase of Rs2,829 compared to the previous day. Similarly, the price of silver per tola climbed to Rs4,303, gaining Rs101, as stated by local market analyst Abdullah.
The rise in the prices of both precious metals can be attributed to several factors. The international rate of gold increased by $33 on Monday, reaching $3,480 per ounce. This significant surge in the international market has indirectly influenced the prices in Pakistan. Abdullah noted a strong demand for both gold and silver across Pakistan, with silver also available in bar form in the local market.
The increase in the international gold rate is largely due to expectations that the US Federal Reserve could cut interest rates in September. The Federal Open Market Committee (FOMC) is scheduled to decide about the monetary policy on September 16-17. Market participants see an 89.4% probability of a 25 basis points interest rate cut, which would lower credit costs and potentially boost demand, including for oil.
The FOMC's decision could be influenced by geopolitical uncertainties, such as US President Donald Trump's willingness to escalate sanctions on Russia. Economists do not believe strong domestic demand in the US will prevent the Federal Reserve from cutting interest rates in September.
In addition to the international factors, the domestic economy also plays a role. Services inflation picked up in July in the US. Meanwhile, in Pakistan, the premium for gold in the local market was $20 on Monday.
The surge in silver demand has been particularly noteworthy. When asked about the gold price per tola reaching Rs400,000 in Pakistan, Abdullah did not rule out the possibility. On Saturday, the gold price per tola in Pakistan's local market reached Rs367,400 after a gain of Rs3,600 during the day.
These price movements underscore the dynamic nature of the global and local precious metals markets, and analysts predict that these trends could continue in the coming days.
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