Why PSX and gold prices are reaching record highs in 2026?

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Both Pakistan Stock Exchange (PSX) and gold prices are setting new records and hitting all-time highs.

In this article we will discuss why PSX and gold prices are increasing. Gold price is hitting record highs because investors around the world are rushing to buy gold as a safe-haven asset when uncertainty rises.

When people feel nervous about global economic or political risks, they often sell risky assets and buy gold instead. This is accelerating gold prices higher both globally and in local markets like Pakistan.

According to market updates, gold in Pakistan crossed Rs 520,000 per tola for the first time, with international prices also rising sharply on strong global cues. Now the gold price is Rs 521,162, which is increased by Rs 6500.

In global markets, gold prices have moved sharply higher to a record level of around $4,985 per ounce by the end of January 2026. Central banks are busy buying large amounts of gold reserves, and rising political tensions in the Middle East and Europe are making investors nervous, which is pushing prices even higher.

What are the factors behind increased gold prices?

•          Global uncertainty and war tensions:

Rising geopolitical risks increase fear among investors, and many choose gold to protect their money.

•          Expectations of lower US interest rates:

If the US Federal Reserve cuts interest rates, holding gold becomes more mesmerizing than keeping cash in low-yield bank accounts.

•          Weak Pakistani Rupee:

Because gold is priced in dollars, any weakness in the rupee makes gold more expensive locally, boosting the gold price even further.

In short, gold is rising because people want to protect their money in uncertain times.

Read more: https://www.pediastan.com/articles/gold-price-in-pakistan/

PSX Market situation:

The Pakistan Stock Exchange (PSX) is now setting new records. The benchmark KSE-100 Index has crossed the 189,000 level for the first time. At the close of trading, the KSE-100 Index posted a gain of 1,478.66 points, or 0.79%, to settle at 189,166.83. This is showing strong confidence among investors. In just one day, the market jumped by nearly 1,500 points, which clearly shows the bright future of the market.

Why PSX Is Also Rising

While gold climbs on fear, the Pakistan Stock Exchange (PSX) is rising on hope and confidence in the local economy. Instead of protecting money, investors in equities are trying so hard to grow their money by buying shares as conditions improve.

First, inflation has fallen to single digits, easing pressure on businesses and consumers. Second, investors expect the State Bank to cut interest rates in the upcoming Monetary Policy Committee (MPC) meeting. When rates fall, stocks usually become more mesmerizing than bank savings.

Big companies like Fauji Fertilizer Company (FFC) and Engro Fertilizers are leading players in the rally. On top of that, hopefulness and optimism around corporate profits and privatization plans turned the PSX into one of the highest-achieving stock markets in the region in the start of 2026.

Gold vs PSX: Different Reasons, Same Trend

To summarize in simple terms:

1. Falling inflation: Lower inflation reduces costs for businesses and supports higher corporate profits.
2. Rate cut expectations: Investors are expecting the State Bank to lower interest rates, making stocks more attractive than bank savings.
3. Economic reforms and confidence: Privatization efforts and structural reforms have strengthened investor confidence in Pakistan’s economic stability.

In 2026, Pakistanis are witnessing both trends at the same time: gold rising with global uncertainty and PSX rising on local economic optimism