There’s still sense of cautious optimism in market

The recent declaration of a ceasefire between the US and Iran on April 8 has brought a sense of relief across the globe. It has allowed traders and investors to quickly adjust and unwind their positions that were influenced by geopolitical issues.

In such circumstances, safe-haven assets typically see increased demand and emerge as true beneficiaries.

As a result, the stock market, along with oil prices, has shown recovery. Major currencies have also strengthened against the US dollar.

However, the ceasefire has resulted in a nearly 15 percent drop in Brent crude oil prices, which had previously soared. Gold prices have been highly volatile, indicative of overall market instability. Unfortunately, this situation has not benefited the Central Bank, as inflation has surged sharply and is expected to continue rising due to its delayed effects on the economy.

Over the past week, global leaders and investors have been closely watching and commending the Pakistani government’s remarkable efforts to mitigate what could be one of the most significant global financial and economic crises of this century, triggered by challenges in the energy and shipping industries.

The world is eagerly anticipating the outcomes of Pakistan’s historic diplomatic initiatives aimed at easing tensions, as well as the results from the Islamabad peace talks where US and Iranian leaders have convened face-to-face to determine their future course. Nevertheless, definitive conclusions will not manifest immediately. Clarity will unfold gradually over time.

Market reactions will provide further insights into the eventual outcomes of these discussions, but it remains too soon for a conclusive analysis, maintaining a heightened risk of market volatility.

Gold prices have long been a dependable market indicator, consistently drawing investor trust because of its reputation as a safe haven. Recently, however, gold price movements have been erratic. Despite reports of Central Banks purchasing gold, the market remains unstable and lacks a clear trajectory. Overall, metal prices have proven to be very unpredictable lately.

Unexpectedly, metals are acting like high-risk assets, subject to rapid price fluctuations. The ongoing volatility and uncertainty are likely to persist due to the significant risks posed by geopolitical factors, liquidity challenges, and cross-border issues.

While successful negotiations could alleviate some pressure on oil prices, we shouldn’t anticipate a return to previous price levels, given the extensive disruption and damage caused by the conflict.

In this context, both gold and silver are expected to rise in value.

The shipping sector may experience some relief, and airlines, hotels, and the tourism industry might find some respite, though it could take longer for these sectors to return to normal operations.

The risk of disagreements or delays in resuming regular activities will likely drive up demand for US dollars.

Recent data from central banks indicates that official gold reserves have tripled over the past three years, surpassing $3.80 trillion, largely due to price increases and central banks stockpiling gold.

Moreover, the most recent foreign exchange statistics from global central banks reveal a decline in the proportion of global reserves held in US dollars dropping from 57.79 percent to 56.32 percent.

However, as mentioned, any disagreements at some stage could exert pressure on gold and silver prices due to liquidity issues. Various essential goods passing through key waterways, such as fertilizers, LNG, and other vital supplies, may face blockages.

Smaller economies relying on USD borrowing will be severely affected by these constraints and credit risks, unless they can secure accessible funding.

Risky assets are likely to continue fluctuating in both directions, dominating the market as long as conditions remain uncertain. While it’s still too early to forecast the future, there is still a sense of cautious optimism in the market.

Lastly, the most pressing question that the suffering global community must address, having already incurred losses in the billions of dollars with even larger losses on the horizon if a peace agreement is not achieved, is how the world will acknowledge and support Pakistan’s economy. Following Pakistan’s remarkable and unprecedented efforts to prevent the world from sliding into a disastrous situation and foster a new normal in geopolitical relations, what steps will be taken to compensate for these efforts and foster goodwill towards the ailing economy of Pakistan?

WEEKLY OUTLOOK - APR 13-17

#GOLD @$4748- This week, volatility is expected to remain a key factor. If gold rises past $4888, it could approach $4965. Conversely, if it drops below $4610, it may lead to a decline toward $4480.

#EURO @1.1720- The Euro finds support at 1.1625, and a break below this level could lead to a risk of falling to 1.1540. Conversely, a definitive breakthrough at 1.1825 is necessary to reach 1.1920.

#GBP @1.3462-For the British Pound to gain upward momentum, it needs to rise above 1.3545 in order to hit 1.3605. However, dropping below 1.3385 could lead to a decline toward 1.3310.

#JPY @159.30- Support at 158.40 will enable the $/Yen pair to attempt to surpass 160.35 for additional gains. If that fails and it declines, the next level to watch is 157.80.

Copyright Business Recorder, 2026