A powerful rally in global gold markets has given a notable boost to Pakistan’s external buffers, with total reserves nearing an all-time high. Global gold prices have soared over 50% so far in 2025, dramatically lifting the value of Pakistan’s official gold holdings to approximately $9 billion, according to Mohammed Sohail, CEO of Topline Securities.
The surge in gold valuations has driven Pakistan’s total reserves — including liquid foreign exchange and gold — to nearly $23 billion, positioning the country on firmer footing amid a turbulent global economic environment. This is one of the highest levels in recent history and reflects how movements in international commodity markets can reshape national reserve structures.
Historically, gold has accounted for around one-third of Pakistan’s total reserve assets over the past decade. That proportion has now shifted dramatically, with gold now comprising close to two-thirds of the country’s reserves. “This is a major structural shift, illustrating how the global gold rally has become a crucial support for Pakistan’s external buffers,” Sohail explained in a post on social media platform X.
The latest data from the State Bank of Pakistan shows total liquid foreign exchange reserves at $19.81 billion. The gold component has added substantial strength to this figure, underlining the role of precious metals in stabilizing external accounts during periods of financial uncertainty.
The sharp rally in gold has been driven by escalating geopolitical tensions, which have spurred investors globally to seek refuge in safe-haven assets. “Physical gold and silver remain in short supply worldwide,” noted Adil Saleem, Founder and CEO of Zariah, in his weekly market commentary. “The squeeze on available metal is pushing prices higher, while investor positioning remains cautious. At the same time, demand for physical gold through ETFs continues to rise, draining liquidity from global vaults.”
This trend has translated directly into gains for Pakistan’s reserve portfolio, which benefits from upward adjustments in the valuation of gold holdings. Unlike foreign exchange reserves, gold reserves are less exposed to currency volatility and have historically provided a hedge against inflation and external shocks.
In parallel, silver prices in Pakistan have also experienced a steep rise in recent months. Over the past three months, the price of silver in the domestic market surged 27%, climbing from Rs4,012.76 to Rs5,100 per tola, closely tracking global movements. Internationally, silver prices rose 32.9% during the same period and are currently trading above $50 per ounce.
Analysts believe the rally in precious metals is part of a broader flight to safety by global investors, spurred by uncertainty in international markets. The strong performance of gold and silver has also helped Pakistan strengthen its external position without the need for large-scale foreign borrowing, providing policymakers with breathing space in the current economic environment.
With global tensions still simmering and investor demand for safe-haven assets remaining strong, Pakistan’s reserve profile may continue to benefit from favorable gold price trends in the near term. However, analysts also warn that such reliance on gold valuation gains is not a substitute for long-term structural reforms to ensure stable and sustainable external accounts.
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