KARACHI: The year 2024 was marked by dramatic highs and volatility in the gold market, both in Pakistan and globally. Gold prices in the local market surged by Rs52,600 per tola, an increase of 23.9 per cent compared to the closing rate of Rs220,000 per tola on December 30, 2023.
Internationally, gold prices rose by $532 per ounce, representing a 25.5 per cent increase from $2,082 at the end of 2023. According to the All Sindh Saraf Jewellers Association, gold rates closed the year at Rs272,600 per tola and $2,614 per ounce in the international market, remaining steady on December 31.
The year saw its highest local price on October 30, when gold reached Rs287,900 per tola, coinciding with international rates peaking at $2,784 per ounce. In contrast, the lowest rates of the year were recorded on February 14, with gold trading at Rs210,800 per tola and $2,010 per ounce.
However, the soaring prices led to reduced trade activity in Pakistan, with only 5-10 per cent of normal activity reported by jewellers. The unaffordability of gold pushed many customers towards selling their gold or opting for smaller purchases, primarily as a hedge against economic uncertainty.
The consistent upward trajectory in gold prices was primarily driven by geopolitical tensions and global economic uncertainties. Escalating conflicts in the Middle East, particularly between Israel and Iran, and the prolonged war in Eastern Europe, fuelled market anxiety. Investors flocked to gold as a safe-haven asset, pushing prices higher.
Economic factors also played a pivotal role. Interest rate cuts by central banks in the US and Europe, coupled with inflationary pressures, further bolstered demand for gold. The US Federal Reserve’s lenient policies and China’s slowing economic growth added to the appeal of gold as a secure investment.
In the local market, gold prices were adjusted with a $20 premium against international rates, reflecting domestic demand dynamics and currency fluctuations. While the year ended with gold prices stabilising, analysts anticipate continued volatility in 2025 due to ongoing geopolitical and economic uncertainties. The combination of global conflicts and economic instability suggests that gold will remain a preferred asset for investors seeking security in turbulent times.
Gold heads for biggest gain since 2010 in mixed year for metals
Gold is heading for one of its biggest annual gains this century, with a 27 per cent advance that’s been fuelled by US monetary easing, sustained geopolitical risks and a wave of purchases by central banks, according to Bloomberg.
While bullion has ticked lower since Donald Trump’s sweeping victory in November’s US presidential election, its gains over 2024 still outstrip most other commodities. Base metals have had a mixed year, while iron ore has tumbled, and lithium’s woes have deepened.
The varied performances over 2024 highlight the absence of a single, over-riding driver that’s steered the complex’s fortunes, while also putting the spotlight on how metals, both base and precious, may fare next year. For 2025, investors are focused on uncertainty around US monetary policy, potential frictions from Trump’s presidency, and China’s efforts to revive growth.
Gold’s strong gains this year -- which have seen the metal set a succession of records -- may signal a possible shift in the market’s dynamics given they have come despite a stronger US dollar and rising real Treasury yields, both typically headwinds.
The precious metal has been “as remarkable as it’s been relentless, making it my biggest market surprise of 2024,” David Scutt, an analyst at StoneX Group Inc said in a note. “The gold game looks to have changed.”
Other metals have struggled in large part because of China’s prolonged economic slowdown.The LMEX Index of six metals on the London Metal Exchange is on track for a modest annual gain, with softer Chinese demand offset by flashes of supply stress -- especially in copper and zinc -- that may linger into 2025.
Iron ore has slumped as weak construction activity plunged China’s steel industry, the world’s biggest, into crisis mode with little relief in sight. Futures in Singapore are down about 28 per cent over 2024.
Lithium -- used to make batteries -- is on track for a second steep annual decline as a serious and ongoing global supply glut was compounded by turbulence for the electric-vehicle industry.