Gold Hits Rs 543,262 on Oil Price Concerns

Gold Hits Rs543,262 as Oil Price Concerns Drive Safe-Haven Demand

Safe-haven assets increased by Rs3,700 per tola as uncertainty in the commodity markets continued to grow due to rising crude oil prices.

KARACHI: Gold prices in Pakistan surged on Wednesday as global commodity markets were influenced by rising oil prices and ongoing geopolitical tensions. Despite a slight decline in international gold prices, the local market recorded another significant increase.

According to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola rose by Rs3,700 to reach Rs543,262. Similarly, the price of 10 grams of gold increased by Rs3,172 and closed at Rs465,759.

Further Growth in the Local Gold Market

The latest increase follows strong momentum earlier in the week. On Tuesday, the price of gold per tola jumped by Rs6,200 and was recorded at Rs539,562 in the domestic market.

The continued upward trend reflects growing investor interest in safe-haven assets as uncertainty in energy markets continues to shape global commodity prices.

The global economic environment is also closely linked to oil consumption, as crude oil prices often play a key role in influencing economic growth and commodity market movements.

Silver Prices Remain Stable

While gold prices climbed in the local market, silver prices remained unchanged.

Silver per tola: Rs9,354

The stability in silver prices contrasts with the volatility seen in gold and other commodities amid ongoing global economic uncertainty.

International Gold Prices Edge Lower

In contrast to Pakistan’s domestic market, gold prices in the international market moved slightly lower on Wednesday.

According to market data:

Spot gold fell 0.3% to $5,177.50 per ounce.

US gold futures for April delivery declined 1.1% to $5,185.20 per ounce.

Analysts attribute the decline largely to the strengthening of the US dollar, which typically puts pressure on gold prices.

The US dollar index increased by around 0.3%, making dollar-denominated commodities more expensive for investors using other currencies. As a result, global demand for gold tends to weaken when the dollar strengthens.

Commodity Cycle Driven by Oil Prices

Market sentiment remains strongly influenced by developments in the global energy market.

Adnan Agar, Director at Interactive Commodities, said the global commodity cycle is currently being driven primarily by oil prices.

According to Agar, oil appears to be entering the final phase of a broader commodity super cycle, while gold and silver may already be near their peak levels in the current cycle.

He also suggested that crude oil prices may currently be artificially suppressed despite significant supply disruptions caused by geopolitical tensions.

Impact of the Iran-Israel Conflict on Oil Markets

Agar noted that the Iran-Israel conflict has disrupted nearly 20% of global oil supply, which could push crude prices significantly higher.

He estimates that oil should realistically trade between $100 and $105 per barrel, roughly $15 to $20 higher than current market levels.

Even if geopolitical tensions ease quickly, he said it could take up to six weeks for global oil supply chains to return to normal.

Additionally, declining strategic petroleum reserves in several countries could create a new long-term oil price range between $75 and $90 per barrel.

Why Gold Prices Recently Pulled Back

Agar also explained recent fluctuations in global gold prices.

He said gold prices briefly dropped to around $4,900 per ounce after global stock markets experienced sharp declines. During that period, some investors were forced to sell precious metals to cover margin calls on leveraged positions, temporarily pushing prices lower.

Pakistani Rupee Shows Slight Improvement

Meanwhile, the Pakistani rupee recorded a marginal gain against the US dollar in the interbank market.

Closing rate: Rs279.35 per US dollar

Previous session: Rs279.36 per US dollar

The slight improvement indicates relative stability in the currency market despite ongoing global economic uncertainty.