Experts are advising Pakistan to increase its Gold reserves as global geopolitical tensions threaten the long-term stability of the US dollar. Rising conflicts in the Gulf region have raised concerns over the dollar-dominated financial system.
A Dubai-based commodities broker told ProPakistani that Pakistan should prepare a contingency plan by gradually converting part of its foreign currency reserves into Gold. This strategy could help protect the country against potential dollar weakness and economic instability.
The State Bank of Pakistan (SBP) is legally allowed to buy and sell Gold under Section 17 of the SBP Act, 1956. The bank can hold gold coins, bullion, or silver either directly or as an agent of the government. While gold holdings reduce short-term liquidity, they provide a secure hedge against financial shocks.
As of February 2026, Pakistan’s Gold reserves totaled 64.76 tons, worth over $10.3 billion. The central bank has added nearly $3.5 billion in gold since the start of the 2025-26 fiscal year. This reflects a growing global trend, as central banks worldwide have increased gold purchases, with over 1,000 tons bought annually for three consecutive years.
Analysts warn that escalating tensions between the US and Iran, combined with increased military spending in the Gulf, could put long-term pressure on the dollar. Any prolonged conflict may disrupt global trade, energy markets, and financial stability.
Some experts suggest Pakistan could consider converting a significant portion of its reserves into Gold to reduce dollar dependence. However, the SBP must balance liquidity needs, international trade obligations, and reserve management strategies.
In other related news also read Pakistani Rupee Rises Against Dollar, Euro, and Pound
While it remains uncertain whether Pakistan will accelerate gold accumulation, the growing global focus on gold highlights its importance as a safe and stable asset. Strategic reserve adjustments could help Pakistan better manage risks amid rising geopolitical tensions.
