Gold edges higher in Pakistan as global markets track US-Iran tensions

ISLAMABAD: Gold prices in Pakistan posted a modest increase on Monday, with the domestic market moving broadly in step with steady international trends as investors assessed the fallout from rising tensions between the United States and Iran and uncertainty over the future direction of US interest rates.

According to the All-Pakistan Gems and Jewellers Sarafa Association, gold was priced at Rs424,536 per tola after gaining Rs300. The rate for 10 grams also rose by Rs258 to Rs363,971. The increase followed a sharper jump on Saturday, when the per-tola price had climbed by Rs2,400.

Silver also registered an increase in the local market. Its price went up by Rs107 to Rs6,177 per tola, reflecting continued interest in precious metals during a period of geopolitical and monetary policy uncertainty.

Global bullion market remains range-bound

Internationally, bullion prices showed limited movement. Reuters reported that spot gold was down 0.1% at $4,014.39 per ounce as of 11:47 am EDT (1547 GMT), while US gold futures for August delivery were unchanged at $4,019. The slight dip in spot prices was linked to a stronger US dollar and higher Treasury yields, which reduced gold's appeal for overseas buyers.

The benchmark 10-year US Treasury note yield rose 0.5%, while the dollar added 0.3%. In broader currency trading, the dollar also strengthened 0.1% against the yen to 162.48, its highest level since July 9, as investors sought safety amid geopolitical strain.

Middle East tensions and Fed outlook in focus

Market sentiment remained shaped by developments in the Middle East. The continuing US-Iran conflict has heightened fears over possible interruptions to energy supplies, lending support to commodities more generally. In a related development, Yemen's Houthis said they would enforce a naval blockade against Saudi Arabia, adding to uncertainty across the region.

At the same time, Federal Reserve Bank of Cleveland President Beth Hammack indicated openness to a possible US rate increase ahead of next week's policy meeting. That has kept investors balancing gold's safe-haven appeal against the prospect of tighter US monetary policy.

Adnan Agar, Director of Interactive Commodities, said the market was moving within a narrow band.