LONDON / KARACHI — The brief rebound in precious metals met a sharp dead-end on Thursday, February 5, 2026, as gold and silver plummeted in response to a surging US dollar and signs of cooling global tensions.
The primary catalyst for the sell-off was the nomination of Kevin Warsh as the next Federal Reserve chief, whose “inflation hawk” reputation bolstered the greenback. Additionally, news of upcoming US-Iran nuclear talks in Oman and a potential easing of US-China trade friction sapped the “safe-haven” demand that had pushed metals to record highs just days ago.
Global Market: The “Feedback Loop” of Selling
Precious metals were caught in a self-reinforcing downward spiral during early Thursday trade:
- Gold: Spot gold fell 2.5% to $4,838.81 per ounce, retreating from its Wednesday recovery.
- Silver: The carnage was more severe in silver, which crashed 14.9% to $74.94, nearly $46 below the record high of $121.64 hit just last week.
- Industrial Exodus: Analysts noted that industrial buyers, including Chinese solar panel manufacturers, have largely exited the market at these price levels, looking for cheaper alternatives.
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Pakistan Market: Mixed Signals Amid Local Holiday
While international markets bled, the Pakistani bullion market remained largely stagnant due to the Kashmir Solidarity Day public holiday on February 5. However, early morning adjustments and Wednesday’s closing rates reflected the extreme volatility.
Bullion Rates (Closing/Adjusted February 5, 2026): | Metal | Unit | Local Price (PKR) | Status | Gold (24K) | Per Tola | Rs. 512,432 | ▼ Down Rs. 5,830 | | Gold (24K) | 10 Grams | Rs. 439,358 | ▼ Down Rs. 5,000 | | Silver | Per Tola | Rs. 14,304 | Static (Holiday) |
Analyst Insight: Local prices had jumped by Rs. 14,800 yesterday. Today’s global crash is expected to trigger another massive “plunge” when full local trading resumes on Friday.
Equity & Tech: AI Costs Spook Investors
The sell-off wasn’t limited to metals. Asian and US tech stocks faltered as investors grew wary of the “exploding costs” of AI investment.
- PSX Performance: The Pakistan Stock Exchange was closed for the holiday, but it ended Wednesday on a high note, with the KSE-100 closing at 187,832 points.
- Global Impact: Losses in cryptocurrencies and regional equities fed into the metals’ decline, creating what OCBC strategists called a “soggy sentiment” across all asset classes.
Gold prices in Pakistan fluctuate frequently based on international market trends.
For details: https://t.co/vWjjdfYGQq pic.twitter.com/oHL7HP3Pab— Profit (@Profitpk) February 5, 2026
Key Drivers of the Crash
- The “Warsh” Factor: Kevin Warsh is expected to lead a more aggressive Fed, keeping interest rates higher for longer.
- Geopolitical De-escalation: * US-Iran: Talks scheduled for Friday in Oman.
- US-China: President Trump described talks with Xi Jinping as “very positive,” mentioning potential soybean purchases.
- Vanishing Demand: Industrial demand for silver and platinum has hit a “brick wall” at current record prices.
With the international market dropping nearly 15% in silver today, Friday’s opening in Pakistan could see one of the biggest local price adjustments of the year.
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