Will Gold Hit the Ground Further or Will It Hit the Sky Again with a Harsh Stroke?

The price of gold is once again at a critical juncture. After steep declines in Pakistan’s domestic market, global bullion prices appear poised for a possible rebound. The question for investors is: will gold continue to fall or is a strong upward move imminent? This article explores the key drivers, recent movements, market forecasts, Pakistan-specific dynamics and practical considerations for investors.

Recent Moves: The Drop and the Possible Rebound

In Pakistan, gold prices per tola recently dropped by more than Rs 14,000 in a single session, bringing the rate down to about Rs 416,362 per tola. At the same time, 10-gram pricing fell by around Rs 12,003 to Rs 356,963. This mirrored international weakness.

Globally, spot gold recently traded around USD 4,009 per ounce after a sharp drop earlier. While some see this as a correction, major institutions are still bullish. For example, HSBC expects gold may reach USD 5,000 per ounce in 2026.

Key Drivers: Why Gold Might Fall Further

• Interest rate expectations: If central banks such as the Federal Reserve keep rates high, the opportunity cost of holding non-yielding gold rises, which tends to weigh on prices.
• Currency strength: A stronger US dollar can make gold more expensive for international buyers, reducing demand.
• Economic growth recovery: If real yields rise and risk aversion falls, gold may lose its safe-haven appeal temporarily.

Key Drivers: Why Gold Could Surge Again

• Geopolitical tensions and risk aversion: Conflicts, trade tensions and persistent inflation tend to push investors toward safe assets like gold.
• Central bank buying: Many central banks continue to diversify reserves into gold, which supports longer-term price stability.
• Forecasts and technical support: Several analysts forecast a medium-term target above USD 4,000 to 4,500 per ounce.

Local (Pakistan) Considerations

In Pakistan, gold pricing is affected by import duties, foreign-exchange movements, local jewellery demand, regulatory changes and reserve pressures. Forecasts suggest the Pakistani gold rate could exceed Rs 400,000 per tola by end-2025 if favorable conditions persist.

However, domestic sell-offs show that local sentiment can turn quickly. For investors in Pakistan, the key factors are currency depreciation and import duties rather than global bullion trends alone.

Outlook 2025-26: What Scenarios Are Possible?

Scenario	Potential Outcome	Estimated Timing
Bearish continuation	Prices fall further – USD 3,800-4,000/oz, Pakistan rate declines	Short term (next 3-6 months)
Rebound rally	Prices recover to USD 4,300-5,000/oz, Pakistan rate increases above Rs 420,000 to Rs 450,000 per tola	Medium term (6-18 months)
Sideways consolidation	Prices remain range-bound USD 3,900-4,300/oz, Pakistan rate fluctuates around current levels	Short to medium term

What to Watch and What Investors Should Do

• Monitor central bank rate decisions, especially from the US and Pakistan.
• Watch the US dollar index, as a weaker dollar often supports gold.
• Track import duty and currency depreciation in Pakistan, which often influence the local gold rate more than global trends.
• For new investors: decide whether your focus is short-term trading or long-term holding. In volatile phases, a buy-on-dips strategy may be safer.
• For existing holders: set profit targets (for example, selling if the rate reaches Rs 450,000 or higher per tola) and consider storage and liquidity factors.

Conclusion

Gold is at a turning point. While recent declines suggest further downside is possible, long-term factors such as central bank buying and global uncertainty support the case for a rebound. For Pakistani investors, the decision depends on how global price trends interact with the rupee’s strength and local demand. The potential for a sharp rise remains strong, but patience and timing are key.

Frequently Asked Questions (FAQs)

Q: Is now a good time to buy gold in Pakistan?

A: For long-term investors, it may be a good time to accumulate. For short-term traders, prices may remain volatile, so caution is advised.

Q: Could gold fall to USD 3,500 per ounce or lower?

A: Yes, if global economic conditions improve sharply and interest rates stay high, gold could temporarily dip to that range.

Q: What level should the Pakistani gold rate reach for a rebound?

A: If global gold climbs above USD 4,300-5,000 per ounce and the rupee weakens, Pakistan’s gold rate could rise to Rs 420,000-450,000 or more per tola.

Q: Should I sell my gold holdings now?

A: It depends on your financial goals. Long-term holders may stay invested, while short-term traders might book profits or reduce exposure amid volatility.