Easing US-Iran Tensions Trigger Sharp Decline in Bullion Markets
KARACHI: Gold prices in Pakistan witnessed a sharp decline on Friday, falling by Rs14,900 per tola as easing geopolitical tensions and a steep drop in international bullion prices reduced demand for safe-haven assets.
According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of 24-karat gold settled at Rs438,036 per tola, compared with Rs452,936 in the previous trading session.
The decline marks one of the largest single-day drops in recent weeks and reflects weakening sentiment in both domestic and global bullion markets.
Domestic Gold Rates Follow International Trend
The price of 24-karat gold per 10 grams also dropped by Rs12,757 to Rs374,205 from Rs386,962 recorded a day earlier.
Bullion traders said local prices closely tracked developments in international markets, where gold came under heavy selling pressure as investors shifted towards riskier assets.
The sharp correction erased a significant portion of the gains recorded earlier this month when geopolitical uncertainty had boosted demand for precious metals.
International Gold Prices Slide
In the international market, gold prices declined by $149 per ounce to $4,156, reflecting a notable improvement in investor sentiment.
Market participants linked the decline to reports of a peace agreement between the United States and Iran, which helped ease concerns about a broader conflict in the Middle East.
Analysts said reduced geopolitical uncertainty encouraged investors to move funds away from safe-haven assets such as gold and into equities and other growth-oriented investments.
Improved Risk Appetite Pressures Gold
Financial markets responded positively to expectations of greater regional stability and improved energy supply prospects.
As risk appetite strengthened, demand for gold weakened, placing downward pressure on bullion prices worldwide.
Analysts noted that gold typically performs well during periods of uncertainty but often faces selling pressure when geopolitical risks recede and confidence in economic growth improves.
Outlook for Gold Prices
Market experts expect gold prices in Pakistan to remain closely linked to international market movements, geopolitical developments and central bank policy decisions.
While Friday’s decline was substantial, traders believe volatility will persist as investors assess global economic conditions, inflation trends and the longer-term impact of improving diplomatic relations between the United States and Iran.
For now, easing geopolitical tensions continue to weigh on bullion markets, leading to a significant correction in gold prices.
