Local Market Sees Sharp Decline as International Bullion Gains
Gold prices in Pakistan experienced a significant drop on Friday, moving counter to a rebound in international markets. According to data from the All Pakistan Sarafa Gems and Jewellers Association, the price of 24-karat gold fell by Rs21,400, settling at Rs507,762 per tola. The rate for 10 grammes decreased by Rs18,347 to Rs435,324.
International Markets See Safe-Haven Rally
In stark contrast, global gold prices rose, recovering from a sell-off in the previous session. Spot gold increased by 2.3% to $4,879.06 per ounce. Analysts attributed the gain to safe-haven demand amid falling global equities and lingering geopolitical tensions between the US and Iran.
“I do see a bit of a safe-haven investment coming in, but bear in mind that there is still some caution after last Friday’s selloff… we still have this fear about Iran-US tension that is still intact,” said Kelvin Wong, a senior market analyst at OANDA.
Key Factors Influencing Precious Metals
Several factors contributed to the complex market dynamics:
- Geopolitical Tensions: High-stakes US-Iran negotiations regarding Tehran’s nuclear program added to market uncertainty.
- Market Volatility: The CME Group raised margin requirements for gold and silver futures for the third time in two weeks to counter risk from heightened volatility.
- Currency Pressure: The US dollar lingered near a two-week high, applying pressure on precious metals.
- Regional Trends: Gold premiums in India more than halved from recent highs as price volatility deterred buyers.
Silver and Other Precious Metals
The local price of silver also declined, with per tola silver falling by Rs1,430 to Rs7,825. Internationally, spot silver was up 4.2% at $74.21 an ounce after a volatile session. Other metals showed mixed performance, with spot platinum adding 0.2% and palladium gaining 2.9%, though both were down for the week.
The divergence between local and international prices highlights the unique economic pressures and currency factors affecting the Pakistani market, even as global investors turn to gold amid geopolitical and financial uncertainty.
