Gold rally boosts Pakistan’s reserves

KARACHI: A remarkable increase in global gold prices is providing a significant boost to Pakistan’s reserves, as estimates indicate that the value of Pakistan’s gold holdings has surged to approximately $9 billion, a brokerage firm reported.

“Gold prices have surged over 50 per cent in the year 2025 to date; and that’s good news for Pakistan,” said Topline Securities in a brief note.

“Thanks to this rally, Pakistan’s gold reserves are now estimated at $9 billion, helping lift total reserves (including liquid FX) to around $23 billion — near an all-time high,” it added.

“On average over the last 10 years, gold made up about one-third of Pakistan’s liquid reserves. Now, it’s closer to two-thirds — a major shift, reflecting how global gold strength is reinforcing Pakistan’s external buffers.”

After touching record highs a day earlier, gold prices tumbled by Rs10,600 per tola on Saturday in the local market, tracking a decline in international bullion rates.

According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of 24-karat gold fell to Rs446,300 per tola, down from Friday’s historic peak. Likewise, the rate for 10 grams of gold decreased by Rs8,331 to Rs350,756.

In the international market, gold prices dropped by $106, settling at $4,252 per ounce. The local bullion market usually adjusts prices with a $20 premium over global rates to account for import costs and market dynamics.

Silver also witnessed a notable fall. The price of silver dropped by Rs231 to Rs5,273 per tola, while the rate for 10 grams declined by Rs198 to Rs4,520.

Even with Saturday’s dip, gold continues to trade near its historic highs, reflecting its strong appeal as a safe-haven asset amid ongoing global and domestic economic challenges.

Awais Ashraf, director of research at Ismail Iqbal Securities, said gold reserves value is at a historic high level due to the continuous rally in international gold prices.

“We expect the reserves to be above $17 billion by June next year, given improved financial inflows and controlled current account,” Ashraf said.

State Bank of Pakistan Governor Jameel Ahmad recently said that the SBP has improved the stability and transparency of the FX market through structural reforms in exchange companies and promotion of remittances through formal channels. These efforts have brought stability in the FX market, allowing SBP to strategically purchase $20 billion during the last three years from the interbank market to build its FX reserves, which have increased around five times since bottoming out in February 2023. At the same time, the SBP’s forward liabilities have also reduced significantly.

He said that Pakistan’s public sector external debt increased only marginally since June 2022. The SBP’s governor emphasised that this improvement in FX buffers reflects the SBP’s policy focus on building FX buffers to withstand external shocks. He also shared that the SBP is targeting to increase FX reserves to $17.5 billion by June 2026.