Rising oil prices linked to geopolitical tensions continued to influence global commodity markets, pushing gold prices higher in Pakistan on Wednesday even as the precious metal edged lower in the international market.

In the local market, the price of gold per tola rose by Rs3,700 to reach Rs543,262, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10 grams of gold increased by Rs3,172 to Rs465,759.

The increase comes a day after the precious metal witnessed a sharp rise in the domestic market. On Tuesday, the gold price per tola had surged by Rs6,200 to settle at Rs539,562.

Meanwhile, the price of silver remained unchanged at Rs9,354 per tola in the local market. In contrast, gold prices declined in the international market on Wednesday as the strengthening of the US dollar and concerns about persistent inflation dampened investor appetite for the safe-haven metal.

Spot gold was down 0.3% at $5,177.50 per ounce as of 9:18 am ET (1318 GMT), while US gold futures for April delivery fell 1.1% to $5,185.20 per ounce, according to Reuters. Analysts attributed the decline largely to the strengthening of the US dollar. The US dollar index rose about 0.3%, making dollar-denominated commodities more expensive for investors holding other currencies, which tends to reduce the demand for gold.

Market sentiment has also been influenced by ongoing geopolitical tensions and developments in global energy markets. According to Adnan Agar, Director at Interactive Commodities, the current global commodity cycle is being driven primarily by oil prices.

He noted that oil was currently in the final phase of a broader “commodity super cycle,” while gold and silver may have already reached their peaks in the current cycle.

Agar said oil prices appear to be artificially managed despite a global supply disruption of nearly 20% linked to the Iran-Israel conflict, arguing that crude should realistically trade between $100 and $105 per barrel, about $15-20 higher than current levels.

He added that even if hostilities end immediately, it could take up to six weeks for global oil supply chains to return to normal levels, while depleted strategic petroleum reserves in many countries could establish a new long-term price range of $75 to $90 per barrel.

Commenting on the gold market, Agar said prices recently dropped to around $4,900 per ounce after global stock markets fell sharply, forcing investors to sell precious metals to meet margin calls on leveraged positions.

The Pakistani rupee registered a marginal gain of Rs0.01 against the US dollar in the inter-bank market on Wednesday, closing at Rs279.35 compared to Tuesday’s close at Rs279.36.