Gold, silver prices move up in Pakistan tracking global trends

The US dollar falls to its lowest level in ​six weeks, making greenback-denominated commodities

Gold and Silver prices rose on Thursday in Pakistan, supported by a weaker dollar and lower US ‌Treasury yields, as investors grew optimistic about a potential end to the Middle East war, which has stoked fears of higher inflation.

Spot gold rose 0.9% to $4,830.82 per ounce by 0455 GMT. US gold futures for ​June delivery gained 0.6% to $4,853.40.

Following international market trends, gold and silver prices in Pakistan recorded further increases, with the price of 24-carat gold per tola rising by Rs1,400 to Rs504,862. Similarly, the price of 10 grams of gold increased by Rs1,200 to Rs432,837.

Meanwhile, the price of silver in the country also increased by Rs110 per tola to Rs8,514, while the price of 10 grams of silver rose by Rs94 to Rs7,299.

The US dollar fell to its lowest level in ​six weeks, making greenback-denominated commodities, including bullion, more affordable for holders of ⁠other currencies.

Benchmark 10-year US Treasury yields eased 0.1%, as hopes of a US-Iran peace ​deal eased higher-for-longer US interest rate bets.

Read: Gold prices continue upward trend locally, globally

"The primary driver (for gold) is the optimism about a ​US-Iran ceasefire that is pushing down longer-term bond yields globally and that kind of created a lower opportunity cost of holding gold and silver," said Kelvin Wong, a senior market analyst at OANDA.

"If we start ​to see a break above $4,900, further potential upside cannot be ruled out towards the next ​intermediate resistance zone, which is at the psychological level of $5,000."

Optimism grew that the war may be near ‌an ⁠end, with a key Pakistani mediator in Tehran and the President Donald Trump administration talking up hopes for a deal that would open the crucial Strait of Hormuz.

Spot gold prices have fallen more than 8% since the Iran war began in late February amid concerns that ​elevated energy prices could feed into inflation and keep global interest ​rates higher.

While ⁠gold is considered a hedge against inflation, higher interest rates weigh on the non-yielding metal's demand.

Read more: Israel, Lebanon to speak on Thursday after '34 years', says Trump

In the US, traders now see a 29% chance of a 25-basis-point interest rate cut this ⁠year. ​Before the war, there were expectations of two reductions ​for this year. 

Among other metals, spot silver rose 2% to $80.61 per ounce, platinum gained 1.6% to $2,143.08, and palladium was ​up 1.4% at $1,592.84.