Gold falls Rs3,300/tola in local market

Gold prices in Pakistan fell on Friday, tracking a divergence from the international market where bullion extended gains on the back of a weaker dollar and easing geopolitical risks after signals of a potential Iran deal.

In the local market, the price of gold per tola dropped by Rs3,300 to settle at Rs501,562. Similarly, 10-gram gold declined by Rs2,829 to Rs430,008, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association. The decline comes a day after gold surged to Rs504,862 per tola on Thursday, reflecting volatility in domestic pricing amid shifting global cues and currency dynamics. Meanwhile, silver prices also fell by Rs70 to Rs8,444 per tola.

In contrast, the international market maintained upward momentum. Spot gold rose 1.5% to $4,860.39 per ounce during early US trading hours and was up more than 2% for the week, according to Reuters. US gold futures also climbed 1.6% to $4,883.20 per ounce.

Analysts attributed the global rally to a softer US dollar and reduced inflation concerns after comments from Iran's foreign minister suggested that the Strait of Hormuz would remain open during the ceasefire, easing fears of supply disruptions and pushing oil prices lower. Market participants also took cues from expectations of progress on a potential agreement involving Donald Trump, which further supported sentiment in bullion markets.

Adnan Agar, Director at Interactive Commodities, noted that gold has regained upward traction amid improving geopolitical clarity. He said the metal is currently hovering near key resistance levels, with $4,890 acting as a crucial hurdle.

"If gold closes above $4,890, it could target $5,000 and even $5,200 in the coming sessions," he said, adding that the easing of tensions surrounding Iran has reduced downside risks and may support a gradual upward trend unless fresh geopolitical triggers emerge. Agar projected that gold could potentially extend gains towards $5,200-$5,400 before entering a consolidation phase.

Other precious metals also remained firm globally, with silver, platinum and palladium heading for weekly gains, reflecting improved investor appetite for safe-haven assets amid shifting macroeconomic expectations. However, regional developments added a layer of complexity, as reports indicated that Indian banks have temporarily halted gold and silver imports due to delays in government clearances, potentially affecting short-term demand dynamics in the region.

Meanwhile, the Pakistani rupee posted a slight uptick in the interbank market on Friday, appreciating by 0.01% against the US dollar. By the close of trading, the currency settled at 278.92, gaining 0.03 against the greenback, according to the State Bank of Pakistan. A day earlier, on Thursday, it had closed at 278.95.

Globally, the US dollar was on track for a second straight weekly decline in subdued trading, as a ceasefire between Israel and Lebanon along with expectations of renewed Iran talks led investors to scale back safe-haven positions. In Asian markets, currencies largely moved within a narrow range, with investors awaiting further clarity, while the euro remained steady at $1.1783 against the dollar.