Due to the increasing uncertainty in the global economy and the instability of the US dollar, there is a fear of a major crash in gold prices in the global and local bullion markets.
According to economists, the demand for gold has decreased due to profit-taking and turning to other safe investments by investors. After the recent decline in the price of gold per ounce in the international market, experts have warned that if the current trend continues, gold prices may fall to the lowest level in recent years. In Pakistan, too, the price of gold is expected to fall by thousands of rupees in local bullion markets, due to which buyers have currently adopted a “wait and see” policy.
Local traders say that the ongoing tension and economic instability on the global horizon are adversely affecting the gold market, which may result in a significant decline in prices. Gold is usually expensive in times of uncertainty (war or political crisis), but the current economic uncertainty is taking a different turn:
When stock markets fall, big investors sell gold reserves to meet their margin calls in order to get cash. Decrease in consumer purchasing power: Due to global inflation, there has been a significant decrease in the purchase of jewellery by ordinary consumers, which has affected the physical market.
The price of gold in Pakistan is linked not only to the global market but also to the value of the rupee. According to experts. If gold falls by $50 to $100 per ounce in the global market, then a major decrease of Rs. 5,000 to Rs. 10,000 per tola can be seen in Pakistan.
Dealers at the local bullion market say that buyers are currently absent from the market due to fears of this potential drop in prices, and only those who need immediate cash are selling gold. Experts advise investors to remain cautious for now, as technical indicators are showing that gold could break its “support level” and fall further.
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