Gold steady despiteglobal slide

Gold prices in Pakistan remained unchanged on Friday despite a decline in international bullion markets, where stronger oil prices and a firmer US dollar weighed on investor sentiment and increased expectations of another US interest rate hike.

In the local market, the price of gold per tola stayed steady at Rs475,362, according to rates issued by the All Pakistan Gems and Jewellers Sarafa Association (APGJSA).

Similarly, the price of 10-gram gold remained unchanged at Rs407,546. On Thursday, the domestic gold market had recorded a sharp increase of Rs5,000 per tola amid earlier global gains and currency-related adjustments.

Internationally, spot gold fell 0.9% to $4,502.59 per ounce by 1457 GMT after touching an intraday low of around 1%, according to Reuters. Bullion was also headed for its second consecutive weekly decline, losing nearly 0.8% during the week.

US gold futures for June delivery also dropped 0.9% to $4,502.70 per ounce, as investors reassessed the outlook for US monetary policy amid persistent inflationary pressures and elevated energy prices.

Market analysts said rising oil prices have intensified concerns that inflation could remain sticky in major economies, particularly in the United States, prompting traders to increase bets on further tightening by the US Federal Reserve. According to market expectations, there is now a 58% chance of at least one US interest rate hike by the end of 2026.

Higher interest rates generally reduce the appeal of non-yielding assets such as gold, while a stronger dollar makes bullion more expensive for overseas buyers.

Meanwhile, silver prices in Pakistan remained unchanged at Rs8,034 per tola.

Commenting on market activity, Adnan Agar, Director at Interactive Commodities, said the bullion market remained sluggish ahead of a US bank holiday on Monday.

"Gold is currently trading around $4,510 to $4,515 per ounce. The market is slow because of the US holiday and investors are also monitoring the final stages of Iran-US developments," he said.

Agar noted that despite current weakness, gold may find strong support at lower levels. "Even if gold declines further, there is a strong possibility it will not fall below the $4,100-$4,200 range and could rebound from there," he added.

Analysts said geopolitical developments, particularly negotiations involving Iran and the United States, would remain a key trigger for bullion prices in the coming sessions.

Meanwhile, the Pakistani rupee edged up 0.01% against the US dollar in the inter-bank market on Friday, gaining Rs0.03 to close at 278.52, compared to Thursday's closing of 278.55, according to State Bank data.

In global markets, the US dollar hovered near a six-week high amid volatile trading triggered by conflicting signals over a potential US-Iran peace deal, though hopes of progress lent some support to sentiment. The dollar index stood at 99.24, slightly below the recent peak of 99.515, its highest level since April 7.