Global financial markets witnessed volatility over the weekend following fresh military actions between the United States and Iran, with both gold and silver recording significant declines.
According to reports, spot gold fell by as much as 1.6% at one point, dropping to around $4,050 per ounce. Gold had also declined 1.4% last week.
Just two days ago, both international and local markets had seen a brief recovery after a one-day dip, with gold in Pakistan rising by Rs 1,100 per tola to Rs 433,536.
The drop comes despite ongoing geopolitical uncertainty, as investors appear to be taking profits and shifting focus back to risk assets amid mixed market signals.
Meanwhile, oil prices moved in the opposite direction. Renewed tensions between Washington and Tehran pushed crude higher in global trade. Brent crude rose by $2.67, or 3.51%, to $78.68 per barrel, while US West Texas Intermediate gained 3.65% to trade at $74 per barrel. Murban crude also reached $74 per barrel.
Analysts said the market is worried that the escalation could disrupt energy supplies through the Strait of Hormuz, a key route for global oil shipments. They warned that further increases in energy costs could add to global inflationary pressure and raise the chances of central banks opting for more interest rate hikes in the coming months.
Markets will now be watching closely for any diplomatic developments between the US and Iran, as both gold and oil remain sensitive to changes in the security situation in the region.
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