Gold prices in Pakistan soared to fresh record highs on Wednesday, tracking the unprecedented rally in international markets where the precious metal’s spot rate surged past the $4,000 mark for the first time.

The rally was driven by geopolitical tensions, economic uncertainty, and expectations of US interest rate cuts, which continued to fuel investor demand for the safe-haven asset.

In the local bullion market, the price of gold per tola rose sharply by Rs8,400, reaching Rs425,178, while 10-gram gold climbed Rs7,202 to sell at Rs364,521, according to data released by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA). Silver prices also advanced, gaining Rs55 per tola to reach Rs4,984.

Spot gold was up 1.6% at $4,045.19 per ounce by 11:38 am ET (1538 GMT). US gold futures for December delivery gained 1.6% to $4,067, according to Reuters.

Market analysts said the current momentum reflects a combination of global uncertainty and speculative buying. Adnan Agar, Director at Interactive Commodities, said the gold market remains heavily overbought and may be entering a “bubble phase.”

“Gold is just going up, up, and up,” Agar said. “With the US government shutdown dragging on and little new data coming in, investors are crowding into gold. But the market is so stretched that even a small trigger could cause a $400-500 correction.”

He noted that gold has posted eight consecutive weeks of gains, the longest such streak in recent memory. “Historically, when we see eight green candles in a row, a major downward correction usually follows,” he added.

Agar said that while some forecasts see gold reaching $5,000-6,000 per ounce next year, a near-term pullback remains likely once the US government reopens and investor sentiment stabilises.

Despite the risk of correction, traders said Pakistan’s market is likely to remain firm as long as the rupee stays under pressure and global safe-haven demand persists.

Meanwhile, the Pakistani rupee recorded a slight uptick against the US dollar on Wednesday, appreciating by one paisa in the inter-bank market. By the day’s close, the local currency stood at 281.21 per dollar, compared to 281.22 a day earlier.

Moreover, the Indian rupee lumbered in a tight band, holding above its all-time low even as the US dollar continued to charge higher, with traders pointing to likely central bank intervention to support the local currency.

The Indian rupee closed at 88.7975 against the US dollar, a whisker away from its all-time low of 88.80 hit last week, but little changed on the day.