Gold prices witnessed a steep fall in both global and Pakistani markets on Saturday, marking one of the sharpest single-day declines this year. The gold price drop reflects a sudden reversal after weeks of record highs, fueled earlier by economic uncertainty and geopolitical tensions.
Global Gold Market Faces a Sharp Correction
In the international market, gold prices plunged by $106 per ounce, settling at $4,252. Analysts described the fall as a “technical correction” following an extended rally that had pushed bullion prices above $4,300 earlier in the week. The decline came as investors booked profits amid reduced fears of prolonged geopolitical instability and a slight recovery in global equity markets.
Economic experts also pointed to easing speculation over imminent U.S. interest rate cuts. As expectations cooled, traders shifted toward riskier assets, driving gold prices lower. Market watchers believe that the sudden gold price drop is part of a short-term adjustment rather than the start of a long-term downward trend.
Local Markets Reflect Global Decline
The downturn quickly spilled into Pakistan’s bullion markets. The price of 24-carat gold per tola dropped by Rs10,600, bringing it down to Rs446,300. Similarly, the rate for 10 grams of gold fell by Rs9,088, now priced at Rs382,630.
Bullion dealers in Karachi and Lahore attributed the fall to international trends, saying the local market typically mirrors global price movements. They also noted reduced buying activity after last week’s record highs, when gold reached an unprecedented Rs456,900 per tola.
Traders explained that many investors who rushed to buy gold during the previous surge are now selling to secure profits, further pressuring prices downward.
Read: Gold Prices Hit Historic High in Pakistan Amid Global Surge
From Record Highs to Sudden Falls
The price correction followed a historic rally earlier in the week. On Thursday, global spot gold had surged past $4,300 per ounce for the first time ever, marking a 7.6% gain within days. The rally was fueled by escalating U.S.-China trade tensions, growing Middle East uncertainty, and expectations of a possible rate cut by the Federal Reserve.
Those factors had driven investors toward safe-haven assets, pushing demand — and prices — to record-breaking levels. However, when geopolitical tensions eased slightly and stock markets rebounded, the upward momentum reversed.
According to analysts, this is a typical market reaction after extreme volatility. “The gold market tends to overreact to economic and political developments,” said a Karachi-based precious metals analyst. “Once panic settles, profit-taking usually follows, which causes prices to cool down.”
Silver Also Suffers Decline
Silver, which had tracked gold’s rise during the earlier rally, also faced a pullback. The price per tola dropped by Rs167, now standing at Rs5,504, while the price per 10 grams fell by Rs143 to Rs4,718.
Traders noted that silver demand remains relatively weak compared to gold, as it is less commonly used for investment purposes in Pakistan. However, any shift in global bullion trends immediately affects both metals.
Market Sentiment Turns Cautious
Following the steep correction, sentiment in Pakistan’s bullion market has turned cautious. Jewelers and investors are closely monitoring the next moves in international trading. Many expect prices to stabilize in the coming week as global markets digest the recent fluctuations.
Dealers say the demand for physical gold remains steady among long-term buyers, especially ahead of the wedding season. However, speculative buyers, who entered the market during last week’s surge, are likely to stay on the sidelines until prices settle.
Impact of Global and Domestic Factors
Economists believe the local gold market’s volatility reflects broader global economic dynamics. Fluctuations in the dollar rate, oil prices, and U.S. monetary policy all influence gold’s direction. A stronger dollar typically pressures gold, as the metal becomes more expensive for investors using other currencies.
In Pakistan, inflationary concerns and a weak rupee have also contributed to fluctuations in gold demand. When the rupee depreciates, local prices often rise even if global rates remain steady. This time, however, the magnitude of the international decline was large enough to bring domestic prices down significantly.
What Lies Ahead for Gold Investors
Experts predict mixed movements in the short term. Some expect prices to hover around current levels as markets reassess interest rate expectations, while others warn of further corrections if global economic data improves.
Analysts advise investors to approach cautiously, suggesting that buying during dips could be beneficial for long-term holders. “Gold remains a valuable hedge against inflation and uncertainty,” said a bullion trader. “But investors should avoid emotional decisions based on short-term fluctuations.”
Despite Saturday’s dramatic fall, gold continues to outperform many other asset classes in 2025. If geopolitical tensions resurface or inflation pressures rise again, analysts believe gold prices could rebound quickly.
Outlook
While the gold price drop has rattled traders and investors alike, experts see it as part of the natural ebb and flow of a volatile market. As global conditions evolve and monetary policies shift, both international and local markets will continue adjusting. For now, cautious optimism and strategic patience appear to be the best approaches for those watching the glittering metal’s next move.
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