Gold prices in Pakistan rebound as global market strengthens

Islamabad: Gold prices in Pakistan rose sharply on Tuesday, following gains in the international market as investors assessed developments in the Middle East and awaited upcoming US economic data that could influence interest rate expectations.

According to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold in the local market increased by Rs4,600 per tola to reach Rs476,362. The price of 10 grams of gold also moved up by Rs3,944 to Rs408,403.

The increase came a day after domestic gold prices had fallen by Rs4,400 per tola to Rs471,762, underscoring continued volatility in the bullion market.

International market trend

In global trading, spot gold was up 0.5% at $4,504.36 per ounce as of 1516 GMT, according to Reuters, after having briefly dropped as much as 2% in the previous session. US gold futures also gained 0.6% to $4,534, reflecting renewed safe-haven demand despite bouts of profit-taking.

Silver prices also recorded an increase in Pakistan, rising by Rs94 to Rs8,153 per tola. In overseas markets, both silver and platinum advanced by more than 1%.

Drivers behind price moves

Market participants said gold continued to respond to geopolitical uncertainty, especially in the Middle East, where changing signals over possible diplomatic engagement between Iran and the United States contributed to sharp intraday swings.

Interactive Commodities Director Adnan Agar said gold touched an intraday high of $4,540 and a low of $4,460 before settling near $4,490. He said the metal remained technically vulnerable in the short term.

"If the market breaks below the $4,400 level, it could move towards the $4,200-4,100 range before attempting a rebound," he said, adding that any escalation in conflict or collapse in diplomatic efforts could swiftly reverse the downward pressure.

Fawad Razaqzada, market analyst at Forex.com, said the broader path of the gold market would hinge on movements in oil prices, bond yields and the US dollar, all of which remained tied to developments in the Middle East.

"depends on the direction of oil prices, bond yields, and the US dollar – all of that, in turn, is tied to the Middle East situation," he said.

Upcoming US employment data due on Friday, along with signals from central banks, are also expected to add to market volatility. Sentiment in bullion markets has also been affected by reports that Iran is considering a possible deal to end hostilities, as well as by downward revisions to some year-end gold forecasts by global banks including Commerzbank.

Separately, the rupee appreciated marginally on Tuesday, closing at 278.46 against the dollar compared with 278.47 a day earlier, an improvement of Re0.01.