Gold prices in Pakistan climbed sharply on Thursday, recovering a large part of the previous day’s losses as international bullion prices moved higher on a weaker US dollar and renewed geopolitical uncertainty.
According to the All Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold surged by Rs3,600 per tola, taking it to Rs433,836 in the local market. The increase came just a day after the precious metal had fallen by Rs4,700 per tola to close at Rs430,236.
The price of 10 grams of gold also recorded a strong rise. It increased by Rs3,086 to reach Rs371,944, reflecting the upward trend seen in global bullion markets.
Silver prices, however, remained unchanged. One tola of silver continued to trade at Rs6,421.
The recovery in local gold prices followed gains in the international market, where investor demand returned after the US dollar weakened against major currencies.
Globally, spot gold rose 0.8 percent to $4,106.82 per ounce during trading after touching its lowest level since July 1 in the previous session. US gold futures for August delivery also gained 0.8 percent to $4,116.40 per ounce. The international rate used by local traders stood at $4,113 per ounce, including a premium of $20.
Market analysts said the softer dollar made gold less expensive for buyers using other currencies, helping prices recover after Wednesday’s decline.
Nikos Tzabouras, senior market analyst at Tradu.com, said gold appeared to be finding support as the recent strength in the US dollar eased.
However, he warned that expectations of interest rates staying higher for longer could continue to limit gains. Higher borrowing costs generally reduce the appeal of gold because the metal does not offer any interest or regular income.
Investors are also keeping a close eye on developments in the Middle East, where fresh military action has increased uncertainty.
The US military carried out new strikes on Iran on Wednesday, prompting retaliatory attacks on Kuwait and Bahrain. The latest escalation has added to concerns that regional instability could affect inflation and global financial markets.
At the same time, US President Donald Trump said Iran had reached out in search of a deal, offering some hope that tensions may not worsen further.
Attention is also focused on the US Federal Reserve after minutes from its latest meeting showed growing concern among policymakers over inflation.
While the central bank kept interest rates unchanged last month, some officials believed there were reasons to consider raising rates. According to the CME FedWatch Tool, traders currently see a 63 percent chance of a US interest rate increase in September.
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