Lahore, Pakistan – For the past two weeks, with global gold and silver prices fluctuating wildly, Waqas Siddiqui has been getting calls from customers asking about shopping at his jewelery store.
Like other countries, the Recent growth, decline and re-emergence Interest in the global bullion market has increased, especially among those looking at gold and silver as investments.
While gold – and to a lesser extent, silver – has long been a favorite among jewelery buyers in Pakistan, it’s a safe place to keep their money that many buyers are looking for these days. And silver seems to be outperforming gold.
“We are mainly in the jewelery business, which is still declining, because people are using precious metals for investments. So, when the rally started, some customers showed interest in our shops to buy silver bars or sell gold,” he told Al Jazeera.
This trend is confirmed by Omer Ehsan, another jeweler who has been running his family business in Lahore for decades. He says, the trend towards investing in gold – and even more so in silver – is growing.
“My clients called to inquire whether they should invest and join the rally, but (I) advised them to be cautious,” he told Al Jazeera, pointing to last week’s sudden rally in prices before last week’s sudden rally.
In the domestic market, 10-gram gold rose by 20,000 rupees ($71) to 440,000 ($1,577) on Wednesday. Silver prices saw similar gains, with 10-gram silver touching Rs 7,800 ($28).
The initial dip, followed by a bounce back, reflected broader moves in international markets, where a bull run in precious metals ended last weekend and prices fell sharply – an unusual occurrence as metals are considered “safe havens” that hold their value during turbulent times.
The Trump Effect
Hanif Chand, a 56-year-old jeweler from Karachi and former vice-president of the city’s jewelery association, told Al Jazeera that the recent upheaval in the bullion market was mainly due to fears of a US attack on Iran, which had fueled market panic.
“On the news that Trump will take more time to make a decision, the markets calmed down a bit. However, if the situation in the Middle East region flares up again, it could skyrocket once again,” Chand said.
Ali Aftab Saeed, an independent investment analyst in Lahore, said another factor driving up gold prices was the increase in gold purchases in China.
Over the past year China has reduced its holdings of US Treasury securities, which have now fallen below $700bn – almost halved from a peak of $1.32 trillion in November 2013 – and has bought large volumes of the precious metal instead.
“The minor fluctuations you see are due to the market setting its course, where investors stop buying after a certain price of a commodity is reached and then the price corrects itself before the next round starts,” he told Al Jazeera. He said he expects metals to move higher again.
Switch to silver
Razzaq Ahmad, owner of a jewelery shop in Islamabad, said that due to the high price of gold, silver is now seen as the metal of choice by many people – and they buy it both for investment and jewellery.
“On an individual level, a small buyer is more interested in buying things in silver, whether it’s silver jewelery or silver jewellery, because they have enough capital to buy at least something and the return on that is significant as prices rise,” he told Al Jazeera.
Ahmed recalled that the price of silver per ten gram was in April last year at a peak of Rs 4,000 ($14) to Rs 15,000 ($53).
Chand agreed that high gold prices coupled with changing social habits have contributed to the decline in investment interest in gold jewellery.
Historically, families bought gold or gold jewelry as an investment, but it could also be passed down to their children upon marriage. That is changing now as families opt for high-end artificial jewelery instead, Chand said.
Now, most of the country’s gold is recycled, he added, adding that skyrocketing gold prices are making silver a more popular investment.
Instead of spending on gold jewellery, “people now prefer to invest in silver bars if they don’t have enough capital. But even if they do, the days of investing in gold jewelery (which is given to families) are definitely fading,” he said.
In 2024, Pakistan imported $27 million worth of gold, making it a very small player in the international gold buying market and ranked only the 84th gold importer according to the Observatory of Economic Complexity.
And, back to the Trump effect
In Lahore, Saeed said many small investors now make their purchases according to their capital availability. This has little effect on the market which is more influenced by the activities of the big players.
“And future prices and their volatility, or lack thereof, depends on the upcoming meeting between US President Donald Trump and his Chinese counterpart Xi Jinping. That will determine the direction of future action for the prices of these metals,” he said, referring to a planned meeting between the two leaders in April in China.
Ehsan added that bullion could fluctuate depending on Trump’s mood. “The market is only going up or down because of his behavior and decisions. One morning he can promise not to attack Iran and by evening he will launch a missile. All these things make the market unpredictable.”