KARACHI:
Gold prices in Pakistan recorded a sharp increase on Wednesday, tracking gains in the international market, where bullion climbed to a near three-week high amid easing geopolitical tensions and a softer US dollar.
In the local market, the price of gold per tola jumped by Rs15,700 to reach Rs504,162, according to the rates issued by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10 grams of gold rose by Rs13,460 to Rs432,237.
The surge comes a day after gold prices had declined, with per-tola rate settling at Rs488,462 on Tuesday following a drop of Rs3,000. Meanwhile, silver also witnessed an upward trend, increasing by Rs440 to Rs8,184 per tola.
In the international market, spot gold gained 1.2% to $4,756.37 per ounce by 11:43 am EDT, after rising more than 3% earlier in the session to its highest level since March 19, according to Reuters. US gold futures for June delivery advanced 2.1% to $4,782.70 per ounce.
The rally in gold prices was primarily driven by a decline in the US dollar and oil prices, following a temporary easing of geopolitical tensions. A two-week ceasefire agreement between the United States and Iran, reportedly brokered with Pakistan’s involvement, helped calm markets and reduce immediate inflationary concerns.
Market analysts noted that lower oil prices and easing tensions tend to support gold by weakening the dollar and improving expectations for interest rate cuts.
Adnan Agar, Director at Interactive Commodities, said the rise in gold prices was largely anticipated, adding that any sustained geopolitical uncertainty could further push prices upwards. He, however, cautioned that the ceasefire remains fragile and may not hold for long.
“The situation is highly uncertain. While the ceasefire may continue for a few days or even weeks, there are multiple factors that could derail it,” he said, pointing to ongoing tensions caused by Israel’s fresh attacks in Lebanon as the key risk.
Echoing similar concerns, analyst Edward Meir noted that while the ceasefire has eased pressure on markets and could open the door for potential US Federal Reserve rate cuts, the agreement remains “tenuous” and subject to rapid change.
Despite the temporary calm, geopolitical risks persist. Reports indicate continued hostilities in Lebanon and retaliatory actions by Iran against regional energy infrastructure, keeping markets on edge.
Analysts say gold is likely to remain sensitive to developments in the Middle East, movements in the US dollar and signals from the Federal Reserve, with volatility expected in the near term.
Meanwhile, the Pakistani rupee edged up by Rs0.01 to 279.05 against the US dollar on Wednesday, while the greenback hit a one-month low globally after Trump announced a two-week Iran ceasefire.
