US action on Venezuela keeps gold buoyant

Precious metal reaches Rs467,962/tola, nears record high globally

KARACHI:

Gold prices in Pakistan climbed on Tuesday, tracking gains in the international bullion market as heightened geopolitical tensions and expectations around US monetary policy lifted safe-haven demand.

In the local market, the price of gold per tola increased by Rs3,200 to settle at Rs467,962, according to the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10 grams of gold rose by Rs2,743 to Rs401,201.

The uptick followed a sharp rally a day earlier, when gold per tola had surged by Rs9,200 to close at Rs464,762.

Silver prices also moved higher, with the metal gaining Rs338 to reach Rs8,361 per tola.

Internationally, spot gold extended its upward momentum, rising 0.9% to $4,488.10 per ounce by 09:55 am ET, after registering nearly a 3% gain in the previous session. Prices are now approaching the record high of $4,549.71 touched on December 24. Meanwhile, US gold futures for February delivery advanced 1.1% to $4,498.70, according to Reuters.

Market sentiment was buoyed by renewed geopolitical concerns after reports of the US arrest of Venezuela's president, which fuelled risk aversion across global markets. Investors are also closely watching upcoming US non-farm payroll data for clues on the Federal Reserve's rate trajectory. Markets are currently pricing in two rate cuts by the Fed later this year, a scenario that typically supports non-yielding assets such as gold.

Adding to the bullish outlook, Morgan Stanley has forecast gold prices at $4,800 per ounce by the fourth quarter, citing sustained central bank demand and geopolitical uncertainty.

Commenting on market conditions, Interactive Commodities Director Adnan Agar said gold remained firmly on an upward trend despite sharp swings. "Gold touched a high of around $4,490 and was later trading near $4,474, with the day's low at $4,427. After a recent correction, prices have been moving up over the last two to three days," he noted.

Agar highlighted that gold was trading roughly $80 below its all-time high, a gap that could be covered quickly given current volatility. He added that renewed strength in silver and platinum also supported gold prices. However, he cautioned that large weekly price swings of 10-20% were unhealthy for market stability.

"Volatility needs to settle, but geopolitical risks remain a key driver. With important economic data due later this week, we may see some moderation in price swings by the second or third week of the month," he said.

Meanwhile, the Pakistani rupee posted a slight recovery on Tuesday, appreciating by 0.01% against the US dollar in the inter-bank market. By the close of trading, the local currency settled at 280.07 per dollar, marking a gain of Rs0.03 compared to the previous session. On Monday, the rupee had ended the day at 280.10.