Gold rises Rs4,100 per tola in Pakistan amid geopolitical uncertainty

LAHORE: Gold prices in Pakistan posted a sharp increase on Tuesday even as international bullion prices weakened, with market sentiment shaped by tensions involving Iran and persistent concerns about global inflation.

According to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold in the local market climbed by Rs4,100 per tola to settle at Rs492,462. The price of 10-gram gold also moved up, gaining Rs3,515 to reach Rs422,206.

Silver prices also registered an increase in Pakistan. The per tola rate for silver rose by Rs395 to stand at Rs8,908.

In contrast, the international bullion market remained under pressure. Reuters reported that spot gold fell 1.4% to $4,669.33 per ounce by 1601 GMT, while US gold futures were down 1.1% at $4,675.90 per ounce.

Market analysts linked the decline in global prices to renewed expectations that diplomatic contacts between the United States and Iran could eventually help bring about a temporary easing of tensions in the Strait of Hormuz, although uncertainty continued to remain high.

Interactive Commodities Director Adnan Agar said gold was still moving within a volatile consolidation range, with prices fluctuating between $4,100 and $4,800 during the past three months.

Agar said investors remained split over whether Washington and Tehran would be able to reach a settlement. He said major US financial institutions, including Goldman Sachs and JPMorgan, were expecting some kind of agreement by June or mid-June, but many participants in the market believed the gap between the two sides was still too wide for a lasting deal.

He added that disruptions associated with the Strait of Hormuz were depleting global oil reserves and keeping upward pressure on crude prices. According to him, oil prices were unlikely to fall below $85 even if the strait reopens, while a new trading range of $90 to $110 could emerge.

Despite short-term corrections, Agar said the broader outlook for gold remained favourable as long as international prices stayed above the $4,400 level.

Rupee edges higher

Separately, the Pakistani rupee appreciated slightly against the US dollar in the inter-bank market. The local currency gained Re0.01 to close at 278.66 against the dollar, compared with Monday's close of 278.67. The US currency, however, remained largely steady in global trade.

The latest movement in Pakistan's bullion market came as investors continued to track geopolitical developments and inflation-related risks that have contributed to volatility across commodities.