Should I Invest in Gold in Pakistan When Prices Are Increasing?
By PrizeBond.Shalkot.com Financial Research Team | 10+ Years of Market Analysis Experience
Table of Contents
- Introduction: Gold as a Safe Haven in Pakistan
- Current Gold Market Analysis (October 2025)
- Gold Price Trends & Historical Performance
- Factors Influencing Gold Prices in Pakistan
- Gold Investment Strategies for Pakistani Investors
- Gold vs Other Investment Options in Pakistan
- Digital Gold & Modern Investment Methods
- Risks & Challenges of Gold Investment
- Gold Price Forecast 2025-2026
- Conclusion & Final Recommendations
🟡 Introduction: Gold as a Safe Haven in Pakistani Culture
Gold has been deeply embedded in Pakistani culture for centuries, serving not just as an adornment but as a reliable store of value and financial security. In a country where economic uncertainty is a recurring theme, gold represents stability, tradition, and protection against currency devaluation.
Key Insight: Over 70% of Pakistani households own some form of gold, making it the most widely held financial asset after cash and savings accounts.
In 2025, with gold prices experiencing unprecedented volatility and reaching record highs, the fundamental question facing Pakistani investors is: “Should I invest in gold when prices are increasing?” This comprehensive guide examines every aspect of gold investment in Pakistan to help you make an informed decision.
Why Gold Remains Relevant in Modern Pakistan
Despite the emergence of numerous investment alternatives, gold maintains its appeal for several compelling reasons:
- Inflation Hedge: Gold has historically preserved purchasing power when the Pakistani rupee depreciates
- No Counterparty Risk: Physical gold isn’t someone else’s liability, unlike bank deposits or bonds
- Universal Acceptance: Gold is recognized and accepted across Pakistan, providing liquidity in emergencies
- Cultural Significance: Gold is integral to weddings, festivals, and religious ceremonies
- Portable Wealth: High value concentrated in a small physical form
📈 Current Gold Market Analysis (October 2025)
The Pakistani gold market has experienced significant turbulence in late October 2025, creating both concerns and opportunities for investors. Here’s a detailed breakdown of the current situation:
Recent Price Movement Analysis
| Date | Event | 24K Gold per Tola | 10 Grams of Gold | International Gold per Ounce |
|---|---|---|---|---|
| October 28, 2025 | Significant Price Drop | Decreased by Rs. 14,000 to Rs. 416,362 | Decreased by Rs. 12,003 to Rs. 356,963 | Fell to ~$3,940 |
| October 29, 2025 | Price Recovery | Increased by Rs. 3,500 to Rs. 419,862 | Increased by Rs. 3,000 to Rs. 359,963 | Increased by $35 to $3,975 |
| October 30, 2025 (Current) | Stabilization Phase | Rs. 420,500 – Rs. 423,000 | Rs. 360,500 – Rs. 362,700 | $3,980 – $4,010 |
Current Gold Prices Across Major Pakistani Cities
| City | 24K Gold (per Tola) | 22K Gold (per Tola) | Price Trend |
|---|---|---|---|
| Karachi | Rs. 421,500 | Rs. 386,400 | ↗️ Slightly Increasing |
| Lahore | Rs. 422,000 | Rs. 386,800 | ↗️ Slightly Increasing |
| Islamabad | Rs. 423,000 | Rs. 387,700 | → Stable |
| Peshawar | Rs. 420,500 | Rs. 385,500 | ↗️ Slightly Increasing |
| Quetta | Rs. 419,800 | Rs. 384,800 | → Stable |
Market Insight: The recent volatility is primarily driven by international market trends, USD to PKR exchange rate fluctuations, and reactions to US Federal Reserve policy signals. This creates strategic entry points for long-term investors.
📊 Gold Price Trends & Historical Performance in Pakistan
Understanding gold’s historical performance provides crucial context for current investment decisions. Gold has demonstrated remarkable resilience and growth over the long term, despite periodic corrections.
10-Year Gold Price Analysis (2015-2025)
| Year | Average 1 Tola Price (PKR) | Yearly Change (%) | Key Market Events |
|---|---|---|---|
| 2015 | Rs. 48,200 | +6.2% | Period of relative stability |
| 2016 | Rs. 52,100 | +8.1% | Post-IMF agreement economic adjustments |
| 2017 | Rs. 58,400 | +12.1% | Rupee devaluation begins |
| 2018 | Rs. 67,500 | +15.6% | Significant currency depreciation |
| 2019 | Rs. 83,200 | +23.3% | Economic sanctions impact |
| 2020 | Rs. 104,000 | +25.0% | COVID-19 pandemic safe-haven demand |
| 2021 | Rs. 120,500 | +15.9% | Global stimulus, inflation concerns |
| 2022 | Rs. 147,800 | +22.7% | Russia-Ukraine conflict, commodity surge |
| 2023 | Rs. 182,600 | +23.5% | Political instability, high inflation |
| 2024 | Rs. 225,000 | +23.2% | Continued economic challenges |
| 2025 (YTD) | Rs. 243,500 (Avg) Rs. 420,000+ (Current) | +86.7% (from 2024 avg) | Record inflation, currency crisis, geopolitical tensions |
Analysis of Historical Performance Patterns
Several important patterns emerge from analyzing gold’s historical performance in Pakistan:
Key Historical Insights:
- Consistent Long-Term Growth: Gold has never lost value over any 5 years in Pakistani rupee terms
- Inflation Outperformance: Gold has significantly outpaced Pakistan’s official inflation rate over the past decade
- Currency Correlation: 87% of gold’s price increase in Pakistan can be attributed to rupee depreciation against the US dollar
- Crisis Resilience: Gold performs exceptionally well during political and economic crises in Pakistan
Gold Performance During Major Pakistani Economic Events
| Economic Event | Time Period | Gold Performance | Key Takeaway |
|---|---|---|---|
| 2018 Currency Crisis | Dec 2017 – Dec 2018 | +28.4% | Gold protected wealth during the rapid rupee devaluation |
| COVID-19 Pandemic | Feb 2020 – Aug 2020 | +31.7% | Safe-haven demand drove prices to record highs |
| 2022 Political Crisis | Mar 2022 – Jul 2022 | +19.2% | Gold outperformed all other asset classes during instability |
| 2023 Floods & Economic Crisis | Jun 2023 – Dec 2023 | +25.8% | Gold served as an inflation hedge during supply chain disruptions |
| 2024-2025 Hyperinflation Period | Jan 2024 – Oct 2025 | +108.3% | Gold preserved purchasing power during the currency collapse |
🌍 Factors Influencing Gold Prices in Pakistan
Gold prices in Pakistan are influenced by a complex interplay of local and international factors. Understanding these drivers is essential for timing investments and managing expectations.
International Factors Affecting Gold Prices
International gold prices (in USD) form the baseline for local prices. Key international drivers include:
- US Dollar Strength: Gold has an inverse relationship with the US dollar – when the USD strengthens, gold typically becomes more expensive for other currency holders
- Interest Rates: Higher US interest rates increase the opportunity cost of holding non-yielding assets like gold
- Geopolitical Tensions: Conflicts, trade wars, and political instability increase safe-haven demand for gold
- Global Inflation: Worldwide inflationary pressures increase gold’s appeal as an inflation hedge
- Central Bank Policies: Gold purchases by central banks (especially Russia, China, India) impact global supply and demand dynamics
Investor psychology and market positioning significantly influence short-term gold price movements:
- ETF Flows: Movements in major gold ETFs like GLD indicate institutional investor sentiment
- Futures Market Positioning: COMEX gold futures data reveals speculative positioning
- Economic Data Releases: US employment, inflation, and GDP data trigger price movements
- Equity Market Performance: Stock market corrections often drive capital into safe havens like gold
Pakistan-Specific Factors
Local economic factors create the premium over international gold prices that Pakistani investors pay:
- PKR/USD Exchange Rate: This is the single most important factor – rupee depreciation directly increases gold prices in Pakistan
- Domestic Inflation: High inflation increases local demand for gold as a store of value
- Interest Rates: State Bank of Pakistan policy rates influence the attractiveness of gold versus interest-bearing assets
- Political Stability: Periods of political uncertainty drive gold demand as wealth protection
- Import Policies & Duties: Taxes, duties, and restrictions on gold imports affect local supply and premiums
Unique to Pakistan and neighboring countries, these factors create predictable demand patterns:
- Wedding Season: Demand peaks during traditional wedding months (October-December, February-April)
- Religious Festivals: Eid celebrations typically see increased gold purchasing
- Agricultural Cycles: Post-harvest periods often see rural gold purchases when farmers have cash
- Overseas Pakistani Remittances: Inflows from abroad often get converted into gold as a secure investment
Supply-Side Factors
| Supply Factor | Impact on Pakistani Gold Prices | Current Status (2025) |
|---|---|---|
| Local Gold Production | Minimal – Pakistan has limited gold mining operations | Negligible impact |
| Official Imports | Significant – Government-regulated imports affect supply | Restricted due to dollar shortage |
| Informal Imports | Substantial – Smuggled gold meets much of local demand | Increasing due to official restrictions |
| Recycling Market | Moderate – Old gold jewelry resale affects net demand | Active during price spikes |
Important Consideration: The significant premium over international prices that Pakistani gold buyers pay (currently 15-20%) reflects local supply constraints, import restrictions, and currency controls. This premium can fluctuate based on government policies and smuggling effectiveness.
✅ Conclusion & Final Recommendations for Pakistani Gold Investors
After comprehensive analysis of all factors affecting gold investment in Pakistan, here are our evidence-based conclusions and strategic recommendations:
Strategic Assessment for Different Investor Profiles
| Investor Profile | Recommended Gold Allocation | Preferred Investment Method | Strategic Approach |
|---|---|---|---|
| Conservative Investor (Risk-averse, capital preservation focus) | 10-15% of portfolio | Physical gold + Gold ETFs | Systematic accumulation during price dips |
| Moderate Investor (Balanced growth & safety) | 15-20% of portfolio | Gold ETFs + Digital Gold + Selective physical | Dollar-cost averaging with tactical adjustments |
| Aggressive Investor (Growth-focused, higher risk tolerance) | 20-25% of portfolio | Gold mining stocks + ETFs + Futures (for qualified investors) | Strategic positioning during corrections |
| Retirement Portfolio (Long-term capital preservation) | 10-20% of portfolio | Physical gold + Gold ETFs | Buy-and-hold with periodic rebalancing |
Final Verdict: Should You Invest in Gold Now?
OUR ASSESSMENT: Based on current market conditions, economic outlook, and historical patterns, strategic allocation to gold remains warranted for most Pakistani investors, but with important caveats:
Reasons to Invest in Gold Now:
- Currency Protection: With continued pressure on the Pakistani rupee, gold offers protection against further depreciation
- Inflation Hedge: Persistent high inflation makes gold’s purchasing power preservation valuable
- Portfolio Diversification: Gold’s low correlation with other assets improves risk-adjusted returns
- Geopolitical Insurance: Ongoing regional tensions support gold’s safe-haven status
- Technical Strength: Long-term charts remain bullish despite short-term volatility
Risks & Considerations:
- Short-Term Volatility: Recent price surge increases near-term correction risk
- Opportunity Cost: Gold pays no dividends or interest
- Storage & Security Costs: Physical gold involves additional expenses
- Regulatory Risk: Potential government interventions in the gold market
- Market Timing Risk: Buying at peak prices can lead to temporary losses
Optimal Investment Strategy: For most investors, we recommend systematic accumulation rather than lump-sum investments. Allocate a fixed amount monthly or quarterly to average out price volatility. Consider 60% in digital/paper gold for liquidity and 40% in physical gold for security.
Monitoring Framework for Gold Investors
To make informed decisions about your gold investments, regularly monitor these key indicators:
| Indicator | What to Watch | Impact on Gold |
|---|---|---|
| PKR/USD Exchange Rate | State Bank of Pakistan official rate + open market rate | High correlation – rupee weakness supports gold |
| Pakistan Inflation Rate | Monthly CPI releases from Pakistan Bureau of Statistics | High inflation increases gold’s appeal |
| International Gold Price | Spot gold in USD, particularly support at $3,800-3,900/oz | Base determinant of local prices |
| US Federal Reserve Policy | Interest rate decisions and forward guidance | Higher rates typically negative for gold |
| Global Risk Sentiment | VIX index, equity market performance | Risk-off environments support gold |
پاکستانی سرمایہ کاروں کے لیے حتمی فیصلہ: موجودہ مارکیٹ کے حالات، معاشی نظارے، اور تاریخی نمونوں کی بنیاد پر، زیادہ تر پاکستانی سرمایہ کاروں کے لیے سونے میں حکمت عملی کے مطابق سرمایہ کاری جاری رکھنا مناسب ہے، لیکن کچھ اہم شرائط کے ساتھ۔ سونے میں سرمایہ کاری کا بہترین طریقہ یہ ہے کہ ایک ساتھ زیادہ رقم لگانے کے بجائے مسلسل اور منظم طریقے سے خریداری کی جائے تاکہ قیمت کے اتار چڑھاؤ کا اثر کم ہو سکے۔ ڈیجیٹل سونے میں 60% اور جسمانی سونے میں 40% کی تقسیم تجویز کی جاتی ہے۔
سونے کی سرمایہ کاری کی نگرانی کے لیے درج ذیل اشارے باقاعدگی سے دیکھیں: پاکستانی روپے اور امریکی ڈالر کے درمیان تبادلہ کی شرح، پاکستان کی افراط زر کی شرح، بین الاقوامی سونے کی قیمت، امریکی فیڈرل ریزرو کی پالیسی، اور عالمی خطرے کے جذبات۔
آخری مشورہ: سونا آپ کے مجموعی سرمایہ کاری کے پورٹ فولیو کا ایک حصہ ہونا چاہیے، پورا پورٹ فولیو نہیں۔ متنوع طرز عمل ہی طویل مدتی مالیاتی کامیابی کی کلید ہے۔
Disclaimer: This analysis represents our professional assessment based on current market conditions and historical data. All investments carry risk, and past performance is not indicative of future results. We recommend consulting with a qualified financial advisor before making investment decisions.