Gold prices soared to unprecedented levels on Monday, May 5, 2025, in both international and domestic markets, fueled by economic uncertainty and robust safe-haven demand.
Investors worldwide are flocking to gold as traditional assets like U.S. stocks, the dollar, and Treasuries falter amid geopolitical tensions and trade policy shifts.
According to market reports, international bullion prices climbed by $76 per ounce, reaching $3,316. In Pakistan, gold followed suit, with the per tola rate rising by Rs6,687 to Rs350,000 and the 10-gram price increasing by Rs6,687 to Rs275,072. These sharp gains reflect heightened demand and market volatility, positioning gold as a premier safe-haven asset.
Impact of Trump’s Trade Tariffs
Trump’s tariff policies have disrupted markets, including a 10% baseline levy on all U.S. imports and higher duties on countries like China (125%). This “tariff blitz” led to a $5 trillion loss in U.S. stock market value and a three-year low for the dollar. Investors, wary of inflation and slower growth, are pivoting to gold, which has risen over 26% in 2025.
Read: State Bank of Pakistan Cuts Interest Rate to 11%
Mohamed El-Erian, Chief Economic Advisor at Allianz, remarked, “The traditional hedging mechanisms broke down almost instantly. The fact that Treasuries didn’t act as a haven reflects growing discomfort with policy unpredictability.”
This surge is strategic, unlike previous gold rallies driven by festive or consumer demand. Sovereign buyers, particularly China, are diversifying away from dollar-denominated assets. Chinese consumer demand remains strong, with spot purchase premiums hitting $39 per ounce, the highest since 2016.
