Summary
- Gold and silver prices witnessed an upward trend in Pakistan on Thursday, mirroring gains in the international bullion market.
- Market analyst Kelvin Wong of OANDA noted that optimism surrounding a potential ceasefire has helped push global bond yields lower, reducing the opportunity cost of holding non-yielding assets like gold and silver.
- He added that if gold prices break above the $4,900 level, further upside momentum could push the market toward the key psychological resistance of $5,000 per ounce.
Gold and silver prices witnessed an upward trend in Pakistan on Thursday, mirroring gains in the international bullion market. The rise was driven by a softer US dollar, easing US Treasury yields, and growing market expectations of a possible de-escalation in Middle East tensions, which have been fueling inflation concerns.
In global trading, spot gold increased by 0.9% to $4,830.82 per ounce at 0455 GMT, while US gold futures for June delivery advanced 0.6% to $4,853.40.
Local Market Movement in Pakistan
Following the international price rally, domestic gold rates also surged. In Pakistan, the price of 24-carat gold per tola rose by Rs1,400, reaching Rs504,862. Similarly, the rate of 10 grams of gold climbed by Rs1,200 to settle at Rs432,837.
Silver prices also moved higher in the local market. The per tola price of silver increased by Rs110 to Rs8,514, while 10 grams of silver rose by Rs94 to Rs7,299.
Dollar Weakness and Bond Yield Trends Support Bullion
The US dollar slipped to a six-week low against major currencies, making dollar-denominated commodities such as gold and silver more attractive for international buyers holding other currencies.
At the same time, benchmark 10-year US Treasury yields edged down by around 0.1%, reflecting shifting expectations around future US monetary policy. Analysts said easing geopolitical tensions and hopes of a possible US-Iran understanding have reduced demand for safe-haven bonds, supporting precious metals.
Market analyst Kelvin Wong of OANDA noted that optimism surrounding a potential ceasefire has helped push global bond yields lower, reducing the opportunity cost of holding non-yielding assets like gold and silver.
He added that if gold prices break above the $4,900 level, further upside momentum could push the market toward the key psychological resistance of $5,000 per ounce.
Geopolitical Developments Influence Sentiment
Investor sentiment has improved amid reports of diplomatic activity aimed at easing tensions in the Middle East. A Pakistani mediator has reportedly been engaged in discussions in Tehran, while US officials have also expressed optimism about progress toward a potential agreement that could reopen strategic shipping routes such as the Strait of Hormuz.
Since the escalation of conflict in late February, gold prices have already dropped more than 8%, as earlier fears of prolonged energy disruptions and inflation pressures began to ease.
Although gold is traditionally viewed as a hedge against inflation and uncertainty, higher interest rates have limited demand for the non-yielding asset in recent months.
Market Expectations on US Interest Rates
In the US interest rate outlook, traders are now pricing in a 29% probability of a 25-basis-point rate cut before the end of the year. This marks a shift from earlier expectations, when markets had anticipated as many as two rate reductions.
Other Precious Metals Also Gain
Other metals also recorded gains in international markets. Spot silver rose 2% to $80.61 per ounce, platinum increased 1.6% to $2,143.08, while palladium climbed 1.4% to $1,592.84, reflecting broader strength in the precious metals complex.
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