Gold up Rs4,100 on global tensions

Gold prices in Pakistan rose sharply on Tuesday despite weakness in the international bullion market, as geopolitical tensions surrounding Iran and concerns over rising global inflation continued to drive uncertainty in commodity markets.

In the local market, the price of gold per tola increased by Rs4,100 to settle at Rs492,462, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10-gram gold climbed by Rs3,515 to Rs422,206.

Globally, however, bullion remained under pressure. Spot gold fell 1.4% to $4,669.33 per ounce by 1601 GMT, while US gold futures lost 1.1% to $4,675.90 per ounce, according to Reuters.

Market analysts attributed the decline in international prices to renewed hopes that diplomatic engagements between the United States and Iran could eventually lead to a temporary easing of tensions in the Strait of Hormuz, although uncertainty remained elevated.

Meanwhile, silver prices in Pakistan also moved higher, gaining Rs395 to reach Rs8,908 per tola.

Interactive Commodities Director Adnan Agar said gold remained trapped in a highly volatile consolidation phase, with prices fluctuating between $4,100 and $4,800 over the past three months.

"The market came down slightly on Tuesday and traded around the $4,670 level. The day's low was $4,635 while the high touched $4,770," he said.

According to Agar, investors remain divided over the prospects of a settlement between Washington and Tehran. While major US financial institutions such as Goldman Sachs and JPMorgan expect some form of agreement by June or mid-June, many market participants believe the differences between both sides remain too wide for a durable deal.

They warned that global oil reserves were being depleted due to disruptions linked to the Strait of Hormuz, keeping upward pressure on crude prices. Oil prices are unlikely to fall below $85 even if the strait reopens. A new range of $90 to $110 may emerge.

Despite short-term corrections, Agar maintained that the broader outlook for gold remained positive as long as prices stayed above the $4,400 level globally. Meanwhile, the Pakistani rupee appreciated by Rs0.01 to 278.66/$ compared to Monday's close at 278.67, while the greenback remained largely steady globally.