In Pakistan, gold is far more than a precious metal; it is a cultural cornerstone, a primary hedge against economic uncertainty, and a vital component of family savings and weddings. As we look towards 2025 and 2026, investors, households, and jewellers alike are keen to understand the forces that will shape the trajectory of gold prices. Predicting exact figures is impossible, but by analyzing global and local drivers, we can map a probable roadmap for the yellow metal’s journey.
The Global Stage: The Primary Driver
Pakistani gold prices, quoted in rupees per tola (11.66 grams), are directly tethered to international prices in dollars per ounce, converted at the prevailing PKR/USD exchange rate. Therefore, the global outlook is paramount.
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US Federal Reserve Policy & Interest Rates: The single most critical factor. If the US Fed continues to cut or hold interest rates in 2025-2026 to avoid recession, the opportunity cost of holding non-yielding gold falls, making it more attractive. This could push international gold prices higher, potentially testing new highs above $2,500/ounce.
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Global Geopolitical Tension: Ongoing conflicts, trade tensions, and global elections (like the US 2024 outcome shaping 2025 policy) fuel safe-haven demand. Persistent instability will keep a firm floor under gold prices.
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Central Bank Purchases: Aggressive gold buying by central banks worldwide (China, India, Turkey, etc.) to diversify away from the US dollar is a structural demand driver likely to continue through 2026.
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Recessionary Fears: Any signs of a significant global economic slowdown in 2025-2026 would trigger a flight to safety, boosting gold’s appeal.
Global Forecast Consensus: Most financial institutions project a bullish to steady trend for international gold over 2025-2026, with prices averaging higher than the 2023-2024 levels, barring a sudden surge in global economic stability and high real interest rates.
The Local Crucible: Pakistan-Specific Multipliers
While global prices set the base, local factors act as a powerful multiplier, often exacerbating price moves in Pakistan.
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The Exchange Rate (PKR/USD): This is the wildcard. The rupee’s value against the dollar will be the most significant determinant of how much of the global price rise translates domestically. If the PKR continues to face pressure due to debt obligations, import bills, and inflationary pressures, even a stable global gold price could translate into skyrocketing prices in rupees. A depreciation of the rupee directly and proportionately increases the rupee cost of gold.
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Domestic Economic Stability & Inflation: Pakistan’s high inflation rate (historically in double digits) erodes the value of the rupee, driving citizens towards gold as a preservation tool. This internal demand surge can create local premiums over the international price. Continued economic volatility in 2025-2026 will sustain this demand.
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Government Policy & Import Restrictions: To curb dollar outflow, the government has historically imposed restrictions on gold imports. This can create local supply shortages, causing prices in the local market to trade at a significant premium to the “import parity” price.
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Informal Market Dynamics: A substantial volume of gold trades through unofficial channels. Fluctuations in hawkish (hawala) dollar rates and demand in these parallel markets also influence local pricing.
Price Outlook for 2025-2026: Scenarios
Considering the interplay of these factors, here are plausible scenarios:
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Base Case (Moderately Bullish): International gold trends upward, averaging $2,300-$2,500/ounce. The PKR experiences managed depreciation (5-10% annually). Result: Gold prices in Pakistan see a steady climb, with the per tola price potentially ranging between PKR 240,000 to PKR 300,000 over the period, with intermittent spikes.
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Bull Case (Very Bullish): Geopolitical crisis escalates, the US enters a recession, and the Fed cuts rates aggressively. International gold soars past $2,600. Concurrently, Pakistan faces a balance of payments crisis, leading to a sharp rupee devaluation (e.g., PKR 350-400 against USD). Result: A perfect storm could push gold prices per tola well beyond PKR 350,000, possibly challenging the PKR 400,000 psychological barrier.
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Bear Case (Corrective): Global inflation is tamed, central banks hold high rates, and geopolitical tensions ease. International gold corrects to $1,900-$2,100. Pakistan secures a lasting IMF program, stabilizes the rupee, and controls inflation. Result: Gold prices in Pakistan could see a correction and consolidation, possibly trading in the range of PKR 200,000 to PKR 240,000 per tola. This scenario is considered less probable given current structural challenges.
Implications for Different Stakeholders
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Investors & Savers: Gold is likely to remain a critical hedge. Dollar-linked gains may be significant, but rupee-based returns could be spectacular if depreciation occurs. Averaging (cost averaging) purchases over time may be wiser than lump-sum investments.
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Brides & Families: Wedding planning must factor in potential significant increases in jewellery costs. Considering lightweight, labour-efficient designs could be a pragmatic approach.
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Jewellers & Traders: Volatility will require agile inventory and pricing management. Emphasis on exchange and old gold business may increase as new purchases become cost-prohibitive for many.
Final Verdict
The glitter of gold in Pakistan over 2025-2026 is expected to be intense, driven by a potent mix of global bullishness and local economic fragility. While the long-term trend appears upward, the journey will be marked by significant volatility. For Pakistanis, gold will continue to symbolize not just wealth and tradition, but also a rational financial defence in unpredictable times. Staying informed on both international gold trends and the PKR/USD exchange rate will be the key to navigating this market successfully.