Gold market slides after unprecedented surge

KABUL (Pajhwok): After a sharp upward trend, the price of gold in global markets has entered a downward trajectory, falling from 4,982 US dollars per ounce to $4,545. Experts link the fluctuation to global political developments and profit-taking by investors.

According to data from Investing.com, which tracks global gold prices, an ounce of gold was priced at $2,860 on February 2 last year. The price rose steadily to reach $4,982 on January 18, 2026, before declining to $4,545 today (February 2).

Haji Mohammad Fawad Salehzada, a gold trader in Kabul, told Pajhwok Afghan News that gold prices have also declined in the local market.

He said the price of one gram of 880-grade gold (equivalent to 21 carats) rose to 11,200 afghanis by January 29, but has been declining over the past three days and was selling at 9,450 afghanis today (Monday).

What is driving gold price fluctuations?

Gold traders say changes in gold prices in Kabul are directly linked to fluctuations in global markets.

Salehzada said the recent decline was driven by international political developments.

“As you know, the rise and fall of gold prices are influenced by global politics and international news. The actions and statements of the US president cause gold prices to go up and down,” he said.

He added that recent US warnings to Iran had pushed gold prices sharply higher, while reports of possible talks between the United States and Iran, mediated by Turkey, were among the main factors behind the recent decline.

Meanwhile, Haji Zakir Aryan, another gold trader at Mashal Commercial Market in Kabul, said gold prices were entirely global and unrelated to Afghanistan’s domestic situation.

“Gold prices depend on the global situation. When the world faces instability, gold prices rise and when conditions improve, prices fall,” he said, adding that tensions in the Middle East have intensified since 2021, contributing to higher global gold prices.

Explaining the recent decline, Aryan said renewed discussions on negotiations between Washington and Tehran in Turkey had pushed prices down.

“If the talks succeed, gold prices will fall further, but if they fail, prices will rise again,” he said.

Experts’ analysis of gold price movements

Economic analyst Abdul Nasir Rashtia said gold prices had risen sharply in recent years due to increased demand driven by uncertainty about the future, security concerns and wars.

“These fears pushed people towards buying gold, causing prices to rise to unprecedented levels,” he said.

However, Rashtia said the recent decline was due to investors selling gold to lock in profits after the price surge, increasing supply in global markets and pushing prices down.

He added that higher issuance of bonds by banks and increased rates had encouraged investors to shift their funds from gold to other sectors.

Another economic expert, Mohammad Shabir Bashiri, said the strategic driver behind gold price fluctuations was investors’ behaviour in buying and selling gold.

“Investors turn to gold when they feel uncertainty about the future of markets, investment and trade, using it as a stable asset to preserve their capital during crises,” he said. “Once confidence returns, they sell gold and reinvest elsewhere. This behaviour is a key factor behind gold price rises and falls.”

Despite the recent decline, the gold market remains influenced by global developments and investor sentiment, and experts believe price volatility is likely to continue.

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