A dramatic gold price crash in Pakistan shocked traders on Wednesday as rates tumbled by Rs11,700 per tola, wiping out earlier gains from record highs. The plunge mirrored declines in international markets, fueled by easing global tensions and improved investor confidence.
Major Drop After Record High
Gold prices in Pakistan fell sharply, with the per tola rate settling at Rs352,000. This marked a significant correction from Tuesday’s all-time high of Rs363,700, which had seen a single-day jump of Rs5,900. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of 10-gram gold also dropped by Rs10,031, now standing at Rs301,783.
International Prices Take a Hit
The international market followed a similar downward trend. Gold fell by $116 per ounce, with the new global rate recorded at $3,338 per ounce, including a $20 premium. Spot gold declined 0.7% to $3,357.11 per ounce, while US gold futures dropped 1.5% to $3,366.80.
This significant pullback comes amid changing geopolitical sentiments and economic cues from the United States.
Read: Gold Price in Pakistan Hits New High Amid Global Uncertainty
Why the Fall Happened
Analysts attribute the gold slide to recent developments involving US President Donald Trump and the Federal Reserve. Trump backed off from earlier threats to dismiss Fed Chair Jerome Powell, signaling a less confrontational approach. Additionally, his optimistic remarks about a potential trade deal with China eased market fears, reducing the demand for gold as a safe-haven asset.
Kelvin Wong, senior market analyst at OANDA for Asia Pacific, explained that these events triggered a sharp sell-off. “The retreat in gold was driven by investors taking profits after safe-haven demand weakened. The market hit an oversold level from a short-term technical standpoint,” he said.
Investor Sentiment Shifts
Trump’s decision to stand down from his feud with Powell, coupled with prospects of US-China negotiations, improved investor confidence. As a result, both US stock markets and the dollar rebounded. These developments undermined gold’s appeal, which typically rises during periods of economic or political uncertainty.
Silver on the Rise
In contrast to gold, silver prices saw a modest increase in the local market. The per tola price of silver rose by Rs16, reaching Rs3,457. While not as volatile as gold, silver’s movement indicates that some investors may be turning to alternative precious metals.
What’s Next for Gold?
Market watchers remain cautious as volatility is expected to persist. Traders are now closely monitoring global economic signals, interest rate policies, and geopolitical developments to anticipate future gold trends.
In the coming days, the interplay between the Federal Reserve’s monetary stance, the strength of the dollar, and ongoing US-China diplomacy will likely shape the gold market’s trajectory. For now, Wednesday’s plunge serves as a stark reminder of how quickly fortunes can shift in the world of precious metals.
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