• Local 22k gold price surged to Rs. 254,000 per sov. before falling to Rs. 234,000
• Spot gold crossed $ 3,500/oz globally as investors sought safe-haven assets
• Surge driven by global rally; correction followed US stock gains, stronger dollar

Local gold prices surged to historic highs last week before sharply correcting as gold prices in the world market fell amidst a strengthening US Dollar and rallies in the US stock market.

Speaking to The Sunday Morning Business, Imithiaz Haneef of Ranlanka revealed that on Tuesday (22), local gold prices had suddenly surged by around Rs. 17,000, which saw 24 carat 8 g (1 sovereign) of gold reach a historic high of Rs. 277,000, whilst the 22 carat 8 g (1 sovereign) had surged to around Rs. 254,000.

He revealed that the sharp rise in local gold prices was in response to the spot gold price in the world market reaching a high of $ 3,509 per ounce. 

Thereafter, local prices had observed a sharp correction on Wednesday (23), which saw the 22 carat 8 g (1 sovereign) fall to around Rs. 234,000 before recovering slightly on Thursday (24).

By Thursday evening, “the local market prices for 22 carat 8 g (1 sovereign) recovered slightly to around Rs. 240,000. Similarly, the price for 24 carat 8 g (1 sovereign) moved to Rs. 262,000,” Haneef noted. 

Similarly, speaking to The Sunday Morning Business, Mohammed Ramzi of We Buy Gold revealed that on Tuesday, local gold prices had reached historic highs, with the 24 carat 8 g (1 sovereign) reaching Rs. 275,000 and the 22 carat 8 g (1 sovereign) reaching Rs. 252,000.

He added: “After moving up sharply on Tuesday, gold prices have now started to fall. We expect prices to keep falling; we expect it to fall by around Rs. 50,000.”

According to Reuters, spot gold has moved up by around 29% Year-to-Date (YTD) and had notched its 28th record high on Tuesday, when it surged beyond the $ 3,500 per ounce mark for the first time.

“JPMorgan expects the rally to continue, projecting that gold will surpass $ 4,000 an ounce next year amid rising recession risks, higher US tariffs, and persistent US-China trade tensions, the bank said in a note on Tuesday,” it noted. 

Reuters further reported that the sharp correction in gold prices in the aftermath of reaching $ 3,500 was due to the comments made by US Treasury Secretary Scott Bessent hinting at a thaw in US-China trade tensions, which saw US stocks jump up by more than 2%, while the dollar index (DXY) rose 0.7% against its rivals, making bullion more expensive for holders of other currencies.

“Rallies in the stock market and the US Dollar index today are negative for the gold market,” Kitco Metals Senior Analyst Jim Wyckoff told Reuters.