Gold retreats amid Hormuz tensions

Gold prices fell in Pakistan on Tuesday due to low trends in the global market due to investor caution before the expiration of a crucial geopolitical deadline set by Donald Trump concerning Iran and the Strait of Hormuz.

According to figures from the All-Pakistan Gems & Jewellers Sarafa Association, gold prices in Pakistan witnessed a fall of Rs3,000 in a tola to Rs488,462. Likewise, the price of 10 grams of gold fell by Rs2,572 to Rs418,777.

This is because gold prices had increased the previous day when per tola prices had appreciated to Rs491,462, increasing by Rs1,100.

Spot gold was unchanged at $4,648.32 per ounce during midday trading after an almost one percent gain earlier in the session. Additionally, gold futures in the United States fell 0.3 percent to $4,670.90.

The market sentiment was still cautious amid expectations for further developments regarding the tension between the US and Iran.

Sources indicated that Iran had not yet signaled its willingness to comply with Washington's ultimatum of reopening the Strait of Hormuz, a major international oil shipping channel.

It was pointed out that market concerns related to whether an extension would happen or if there might be any escalation had kept markets range-bound in the previous few sessions.

Adnan Agar, Director at Interactive Commodities, said that the approaching deadline, which was expected to be early Wednesday Pakistani time, had put investors under pressure. According to him, if a diplomatic solution is achieved, the prices of gold may move up even more as they continue to serve as a safe haven asset, but the oil prices may decline because of less tension.

Conversely, the lack of any compromise may drag down the price of gold initially, but any military escalation can lead to significant gains in gold due to risk appetite. The price of gold was trading at $4,660 in the session after hitting the low of $4,600 earlier and gaining $50-60.