Gold gains Rs4,700/tola on US-Iran truce hopes

Gold prices in Pakistan rose sharply on Tuesday, mirroring gains in the international market, where the precious metal climbed more than 1%. The uptick came on hopes of a diplomatic breakthrough between the United States and Iran that could ease tensions in energy markets and moderate expectations of aggressive rate hikes by the Federal Reserve.

In the local market, the price of gold per tola reached Rs429,236, registering a significant hike of Rs4,700, according to the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the 10-gram gold was sold at Rs368,000 after increasing by Rs4,029.

On Monday, gold had closed at Rs424,536 per tola following a modest gain of Rs300. The latest jump reflects strong investor sentiment driven by global developments.

Internationally, spot gold advanced 1.7% to $4,077.09 per ounce by 11:20 am EDT (1520 GMT), as per Reuters. US gold futures for August delivery rose 1.6% to $4,080.20. The market movement comes as investors anticipate a potential de-escalation in US-Iran tensions, which could stabilise oil prices and influence monetary policy expectations.

Interactive Commodities Director Adnan Agar noted the positive momentum in the gold market. "The gold market has moved up a bit." The high was $4084, the low was $4,003, and later the market was around $4,070. "Today (Tuesday), the market was trying to push towards the upside," he said.

Agar highlighted the key technical levels to watch for. "We just need to see if the market closes above $4,200 again; if it does, there are chances it will move further upside. If it doesn't, then the downside risk remains," he added.

Analysts are closely monitoring the evolving US-Iran situation. Tehran has reportedly received a proposal from mediators for a 10-day ceasefire, bringing some calm to the region for now. However, any escalation in tensions or disruptions in energy supplies could weigh on gold prices, while signs of a temporary ceasefire are likely to support further upside.

Investors are also awaiting the US Federal Reserve's rate decision and comments next week. Traders currently see a 68% chance of a rate hike in September. The broader market dynamics suggest that gold's appeal as a safe-haven asset remains intact amid geopolitical uncertainties and policy anticipation.

Meanwhile, silver prices in the local market also increased, reaching Rs6,396 per tola with the addition of Rs219. Pakistani rupee ended marginally firmer at Rs277.92 against the US dollar, up Rs0.03 from the previous day. Globally, the greenback stayed near one-week high amid mixed Middle East signals and ceasefire hopes.