Gold prices rise in Pakistan after two-day slide

KARACHI: Gold prices in Pakistan rose on Wednesday, reversing a two-day decline, as international bullion prices gained amid heightened geopolitical uncertainty and shifting expectations over US monetary policy.

The price of 24-karat gold increased by Rs800 per tola to Rs462,936, according to rates issued by the All-Pakistan Gems and Jewellers’ Sarafa Association (APGJSA).

The price of 10-gram gold rose by Rs686 to Rs396,893.

The increase followed a combined decline of Rs3,400 per tola over the previous two sessions.

Gold fell Rs2,400 on Monday and another Rs1,000 on Tuesday, when the price stood at Rs462,136.

Wednesday’s increase of Rs800, however, recouped only part of the losses recorded during the previous two trading sessions.

The 10-gram price similarly rose by Rs686 on Wednesday after falling by Rs2,058 on Monday and Rs857 on Tuesday.

International prices rise

International gold prices also moved higher on Wednesday, with the APGJSA reporting an $8 increase to $4,404 per ounce.

The move followed a weaker session on Tuesday, when the international price reported by the association fell $10 to $4,396 per ounce.

Reuters reported on Wednesday that gold rose by about 1 per cent to around $4,401 an ounce, as investors sought safety amid heightened tensions in the Middle East.

The latest gains came as oil prices climbed above $100 a barrel amid escalating conflict in the region, increasing concerns about inflation and the outlook for global monetary policy.

Fed policy remains key

Gold has also been sensitive to changing expectations about the U.S. Federal Reserve’s interest-rate policy.

On Tuesday, Reuters reported that spot gold fell 0.4 per cent to $4,385.09 an ounce as rising oil prices fuelled inflation concerns and increased expectations of a US rate hike this month.

Markets are closely watching US inflation data due later this week for clues about the Federal Reserve’s next policy decision. Stronger inflation could reinforce expectations for higher interest rates, potentially weighing on gold because the metal does not pay interest.

At the same time, heightened geopolitical tensions tend to support demand for gold as a traditional safe-haven asset.

Domestic market remains volatile

Gold prices in Pakistan are influenced by international bullion prices as well as movements in the rupee-dollar exchange rate and local market conditions.

Silver also gained on Wednesday, with its price rising Rs72 per tola to Rs7,141, according to APGJSA.