Gold prices in Pakistan recorded a sharp decline on Saturday, tracking a steep fall in the international market as investors reacted to growing expectations that the US Federal Reserve could raise interest rates.
According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of 24-karat gold dropped by Rs15,100 per tola to settle at Rs467,936.
The price of 10 grams of 24-karat gold also fell by Rs12,946, bringing it down to Rs401,179.
The decline came a day after gold prices remained unchanged in both the domestic and international markets.
In the global market, gold prices weakened significantly, with the international rate used by local traders falling by $151 to $4,454 per ounce, including a premium of $20.
Silver also followed the downward trend in the local market. The price of silver fell by Rs397 per tola to Rs7,112.
Globally, bullion came under heavy selling pressure after remarks from US Federal Reserve Chairman Kevin Warsh strengthened expectations of further monetary tightening. Investors interpreted his comments on inflation as a signal that the central bank may still need to raise interest rates if price pressures fail to ease sufficiently.
Spot gold dropped nearly 3 percent during Friday’s trading to around $4,567.23 per ounce, touching its lowest level since August 20, while US gold futures for December delivery settled almost 3 percent lower at $4,529.90 per ounce.
The precious metal has now declined about 2.9 percent over the week, retreating from the more than three-month high it reached earlier this week.
Market participants also increased their expectations of a US rate hike following Warsh’s comments. Higher interest rates typically reduce the appeal of non-yielding assets such as gold, while a stronger US dollar further pressures bullion prices by making it more expensive for buyers using other currencies.
Among other precious metals, spot silver lost 3.5 percent to $66.81 per ounce, platinum eased 0.6 percent to $1,835.07, while palladium bucked the trend, rising 5.3 percent to $1,422.25 per ounce.