KARACHI, April 24, 2025 – Gold prices in Pakistan experienced a dramatic decline on Wednesday, mirroring a sharp downturn in the global bullion market. The drop, one of the largest in recent history, was triggered by signals of easing geopolitical tensions, particularly around US-China trade relations, prompting speculation of a sustained market correction.
The All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) reported a staggering Rs11,500 per tola decrease, bringing the price to Rs352,500. Similarly, the price of 10 grams of gold fell by Rs9,857 to Rs302,143. This follows a peak of Rs364,000 per tola just a day earlier, driven by a Rs6,000 single-day surge.
On the international stage, gold prices also saw a significant retreat, dropping $110 per ounce to $3,340, including a $20 premium. Market analyst Zainab Hameed, a member of APSGJA, described the decline as “unprecedented in its scale,” noting that the last comparable drop occurred in mid-November 2024, when prices fell $75 per ounce in a single session.
Geopolitical Signals Drive Market Volatility
Commodity expert Bilal Raza attributed the correction to de-escalation cues from US President Donald Trump regarding potential tariffs on Chinese goods. “The global gold market touched a low of $3,175 on Wednesday before stabilizing around $3,290. Over 48 hours, prices have shed nearly $225,” Raza explained. He added that prices could further adjust to a $3,230-$3,200 range if trade negotiations progress, potentially leading to a months-long correction in gold markets.
The volatility underscores the sensitivity of gold prices to geopolitical developments, with Pakistan’s local market closely tracking these global trends. Investors are now bracing for potential further declines as market sentiment shifts.
Pakistani Rupee Faces Slight Pressure
In parallel, the Pakistani rupee experienced a minor depreciation against the US dollar, closing at Rs281.05 in the inter-bank market on Wednesday, down 22 paisa or 0.08% from Rs280.83 the previous day, according to the State Bank of Pakistan (SBP). Analysts attribute this to routine fluctuations in demand and supply, with the rupee remaining relatively stable within a tight range.
The SBP noted that the rupee weakens when more rupees are needed to purchase a US dollar, while it strengthens when fewer are required. Despite the slight dip, the currency market remains calm, supported by steady inflows from overseas Pakistanis.
Remittance Inflows Bolster Economy
Remittances through the Roshan Digital Account (RDA) continued to provide economic support, reaching $10.015 billion by March 2025, up from $9.775 billion in February, per SBP data. March alone saw inflows of $240 million, compared to $210 million in February and $225 million in January.
The RDA initiative, designed for non-resident Pakistanis (NRPs) and Pakistan-origin cardholders, facilitates banking, payments, and investments. By March 2025, the number of RDA accounts grew to 806,500, up by 54,000 from 752,500 in February. Investments through the program included $465 million in Naya Pakistan Certificates, $890 million in Naya Pakistan Islamic Certificates, and $65 million in Roshan Equity Investment, reflecting strong confidence among the diaspora.
Outlook for Gold and Currency Markets
As global and local markets navigate these turbulent times, analysts urge caution. The potential for further corrections in gold prices looms, particularly if US-China trade talks advance. Meanwhile, the Pakistani rupee’s stability and growing remittance inflows provide a buffer against external pressures, supporting the broader economy.
Market participants will closely monitor upcoming geopolitical developments and their impact on both commodity and currency markets in the weeks ahead.
