Metal prices on August 13, 2025: gold and silver

Gold Prices in Pakistan: Factors Shaping the Market

Gold, a timeless and valuable commodity, has been a popular investment choice for many in Pakistan, particularly during economic uncertainty. On Wednesday, the price of 1 tola of gold decreased by Rs200, reaching Rs358,300 per tola.

The gold rate in Pakistan is influenced by a variety of factors, including economic indicators, currency fluctuations, central bank policies, demand and supply dynamics, and geopolitical factors.

Economic Indicators

Gold is often seen as a hedge against inflation and economic uncertainty. Higher inflation generally pushes gold prices up, while rising interest rates tend to lower them due to the increased appeal of interest-bearing assets.

Currency Fluctuations

Since gold is priced chiefly in US dollars, the strength or weakness of the US dollar directly affects gold prices globally. A weaker dollar makes gold cheaper for buyers using other currencies, increasing demand and price, while a stronger dollar does the opposite. For instance, in Pakistan, rupee depreciation raises local gold prices through higher import costs.

Central Bank Policies

Actions by central banks, such as the US Federal Reserve's decisions on interest rates, significantly impact gold. Dovish monetary policies or rate cuts make gold more attractive, while rate hikes usually reduce demand. Central banks also directly buy or sell gold, affecting supply-demand balance.

Demand and Supply Dynamics

Gold production levels and demand from sectors like jewelry, industrial uses, and investment (including ETFs and bullion) influence prices. Increased investment demand, especially during economic uncertainty, boosts gold prices.

Geopolitical Factors

Political instability, trade disputes, and global crises often drive investors toward gold as a safe haven, increasing prices. Heightened geopolitical risks have recently supported gold price rallies to record highs.

Local Market Factors

Gold and silver prices in Pakistan are subject to change and may vary from city to city. The gold rate per 10 grams in Pakistan on August 13, 2025, is Rs307,013, while the silver rate per tola is Rs4,072 and per 10 grams, Rs3,491. Predicting future gold rates in Pakistan can be challenging due to market volatility and economic and political uncertainty.

Investor Behavior

Investor behavior plays a role in determining gold rates. When the rupee is under pressure, investors seek refuge in gold as a safe-haven metal. Gold and silver have been used for coins for centuries, and they remain valuable commodities like oil in the global market.

Regulation and Fixing

Gold prices in Pakistan are fixed by respective Sarafa associations in their cities. International gold prices impact the local gold rates in Pakistan.

Interest Rates

Interest rates can also affect the gold rate. When interest rates are high, the return on gold investment seems less attractive, potentially decreasing demand and lowering gold prices.

In summary, gold's global rate is shaped by a complex interplay of macroeconomic conditions, currency movements, central bank actions, physical demand-supply balance, and geopolitical events, all contributing to its status as a safe-haven asset.