Gold prices in Pakistan climbed sharply on Friday, with the local market tracking a strong rise in international bullion rates amid continued uncertainty over the Middle East.
The price of gold rose by Rs6,900 per tola to reach Rs460,336, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).
The price of 10-gram gold also increased by Rs5,914, taking it to Rs394,663.
The latest rise came after gold had fallen by Rs3,800 per tola on Thursday to settle at Rs453,436.
In the international market, gold gained $69 to reach $4,378 per ounce. Spot gold was up 0.9 percent at $4,378.19 per ounce by 0829 GMT, while US gold futures rose 0.4 percent to $4,418.20.
Gold extended its gains for a second consecutive session and touched a one-week high as oil prices declined and investors continued to monitor developments in the Middle East.
Falling oil prices helped support gold as markets weighed the possible impact of the conflict on inflation and interest rates.
“The precious metal appears to have taken the Fed’s hawkish signals in stride, instead finding immediate relief from falling oil prices amid hopes that the Fed’s hiking cycle will prove shallow,” said Han Tan, chief market analyst at Bybit.
The US Federal Reserve raised interest rates on Wednesday and signalled further increases in the coming months. Higher interest rates can weigh on gold because they make interest-bearing assets more attractive.
Goldman Sachs said tighter monetary policy was likely to affect the pace of gold’s near-term gains rather than push down its longer-term price.
The Bank of Japan also raised interest rates to a 31-year high and indicated that it could continue tightening monetary policy as inflation remains a concern.
Analysts said the Middle East conflict could remain an important driver for gold prices. Prolonged fighting and higher oil prices could fuel inflation and lead central banks to keep interest rates higher for longer, which could put pressure on gold.
Meanwhile, silver prices in Pakistan increased by Rs300 to Rs7,169 per tola.
In global markets, spot silver rose 2.7 percent to $66.92 per ounce, while platinum gained 2.5 percent to $1,813.70 and palladium increased 2.6 percent to $1,324.12. All four metals were heading for weekly gains.