Economic Instability and Global Tensions Drive Gold Prices Higher
Pakistan is witnessing a historic surge in gold prices, with rates crossing PKR 532,000 per tola. While global gold prices have steadily increased since the COVID-19 pandemic, the rapid rise in Pakistan has sparked debate over whether it is driven by global conditions, domestic economic instability, or growing public preference for gold over paper currency.
Historically, gold has held a unique value, not only for its material wealth but also for its cultural, religious, and social significance. From ancient times, access to gold reserves, mining, and refining were central to the prestige of rulers and the stability of their treasuries. In South Asia, temples and royal courts often featured gold-plated idols, jewelry, crowns, coins, and vessels, exemplified by Gujarat’s famed Somnath temple, whose vast gold reserves were looted in 1026 CE.
During the Mughal era, gold was abundant and widely distributed, and coins were minted in precious metals. The British colonial period saw a shift to paper currency, with local populations paid in notes while actual gold reserves were moved to Britain, fostering dependence on currency backed by government assurance rather than tangible wealth.
At the time of Pakistan’s independence in 1947, gold was priced at roughly PKR 57–60 per tola, accessible to the common citizen. Prices rose gradually, reaching PKR 180 per tola by 1970. The 1980s saw sharp increases, with gold hitting PKR 2,000 per tola. By the start of the 21st century, prices were around PKR 8,000 per tola and had risen to PKR 100,000 per tola by 2020, before the COVID-19 pandemic. Today, six years later, gold has surpassed PKR 532,000 per tola, marking an increase of over 6,500 times since independence.
Globally, gold has also reached unprecedented levels, trading above USD 2,500 per ounce. Internationally, markets in the UAE, India, Thailand, and other countries are reporting similar price fluctuations. Experts note that economic uncertainty, geopolitical tensions, and diminished confidence in paper currencies typically drive demand for gold, which in turn pushes prices higher.
Historically and globally, gold prices reflect broader economic stability and security. Events such as the 1970s oil crisis, early 21st-century anti-terror operations, the COVID-19 pandemic, and ongoing geopolitical uncertainties have consistently influenced gold markets. Analysts stress the need for peaceful, cooperative solutions to global conflicts to help stabilize gold prices and economic confidence.
