Gold prices posted a strong gain in Pakistan on Tuesday, tracking a sharp rise in the international bullion market as investors continued to monitor developments surrounding the U.S.-Iran conflict and its potential impact on global inflation and interest rates.
According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold climbed by Rs4,700 per tola to settle at Rs429,236. The rate for 10 grams also moved higher, rising by Rs4,029 to Rs368,000.
The increase followed a relatively modest rise a day earlier, when gold added Rs300 per tola to close at Rs424,536.
In the international market, gold gained $47 to reach $4,068 per ounce, including a premium of $20. Spot gold later traded more than 1.5 percent higher at around $4,072 an ounce, while U.S. gold futures also advanced, supported by renewed demand for safe-haven assets.
Market participants remained focused on diplomatic efforts aimed at reducing tensions between the United States and Iran. Although reports suggested mediators had proposed a temporary ceasefire, investors stayed cautious after fresh attacks in the region and ongoing concerns over energy supplies.
Analysts said gold appears to be finding support around the $4,000-an-ounce level, with investors returning to the precious metal despite signs that geopolitical headlines are having a less dramatic impact on markets than before.
Traders are also assessing what rising oil prices could mean for inflation and U.S. monetary policy. While the Federal Reserve is widely expected to leave interest rates unchanged at its next meeting, expectations for a possible rate increase later this year remain on the table.
Higher interest rates typically reduce the appeal of gold because the metal does not generate any yield. However, uncertainty surrounding geopolitics and inflation continues to underpin investor demand.
Meanwhile, silver also recorded a sharp increase in the local market, with its price rising by Rs219 to Rs6,396 per tola.
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