Gold surges to Rs476,000 amid US-Iran tensions

Safe-haven asset soars Rs3,900 per tola; rupee inches up to 279.16/$

KARACHI:

Gold prices in Pakistan extended their upward trajectory on Monday, tracking gains in the international market where bullion rose for a second consecutive session amid renewed safe-haven demand linked to ongoing geopolitical tensions in the Middle East.

In the domestic market, the price of gold per tola surged by Rs3,900 to settle at Rs475,962, according to data released by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10 grams of gold increased by Rs3,343 to reach Rs408,060.

The latest increase follows Saturday's sharp rise, when gold per tola jumped by Rs4,800 to close at Rs472,062, indicating sustained bullish momentum in the local bullion market.

Silver prices also moved higher, with per-tola rates increasing by Rs70 to reach Rs7,524, reflecting a broader uptick in precious metals.

Globally, spot gold gained 0.9% to $4,531.21 per ounce by midday trading, recovering from its lowest level since November recorded earlier last week. Despite the recent rebound, bullion remains down around 14% for March, as evolving expectations around inflation and interest rates continue to shape investor sentiment.

Market participants attribute the recent support for gold prices to heightened uncertainty stemming from the ongoing US-Iran tensions. Conflicting signals on potential peace negotiations have added to volatility, keeping investors cautious and inclined towards safe-haven assets like gold.

Commenting on market dynamics, Adnan Agar, Director at Interactive Commodities, noted that gold is currently trading within a defined range, with prices fluctuating between $4,420 and $4,580 in recent sessions. He emphasised that a decisive break above the $4,600 level is critical to trigger further upside, potentially opening the path towards $4,800-5,000.

Agar also highlighted the role of macro-financial factors, particularly movements in the US dollar, bond yields, and equity markets. According to him, a sharp decline in US equities could strengthen the dollar and push bond yields higher, creating downward pressure on gold prices. Conversely, a stable dollar may allow gold to gradually edge higher.

He added that geopolitical developments, including any escalation such as the potential deployment of ground forces, could significantly alter market direction by triggering volatility across global financial markets.

Analysts expect gold to remain sensitive to both geopolitical headlines and monetary policy signals, with near-term direction hinging on developments in the Middle East conflict and global financial conditions.

Meanwhile, the Pakistani rupee posted a marginal gain against the US dollar, closing at 279.16 in the inter-bank market on Monday, up Rs0.01 from Friday's close at 279.17. Globally, the dollar remained firm near a monthly high, with the index at 100.14, while the euro hovered at $1.1512, marking a decline.