Gold prices in Pakistan fell on Wednesday as a decline in the international market pulled local rates lower, with investors keeping a close eye on the US Federal Reserve’s next policy signals.
The price of gold dropped Rs3,100 per tola to Rs434,436, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).
The price of 10-gram gold also declined by Rs2,658, settling at Rs372,458.
Gold had remained unchanged a day earlier, with the price of one tola standing at Rs437,536 on Tuesday.
The latest decline came as international gold prices weakened amid a stronger US dollar. The international rate used for local pricing fell $31 to $4,119 per ounce.
In global trading, spot gold was down 0.98 percent at $4,122.73 per ounce by 0905 GMT, while US gold futures for December delivery slipped 0.91 percent to $4,149.
The dollar index gained 0.4 percent, making gold more expensive for buyers holding other currencies and putting further pressure on the precious metal.
Investors were also cautious ahead of the release of minutes from the US Federal Reserve’s September meeting. The minutes are expected to offer more clues about how strongly policymakers support further interest rate increases.
“There is also an element of caution ahead of the release of the latest Federal Open Market Committee minutes,” said Ricardo Evangelista, director and CEO of ActivTrades.
Markets have largely priced in the possibility of the Fed keeping rates unchanged in October following weaker US jobs data. However, expectations of another rate increase in December remain strong, with the CME FedWatch tool putting the probability at around 86 percent.
Higher interest rates generally weigh on gold because the metal does not generate interest or other income for investors.
Despite the latest decline, analysts said several factors continued to provide support to gold, including geopolitical uncertainty, concerns over government debt, inflation risks and continued buying by central banks.
China’s central bank added to its gold holdings in September, extending its buying streak to 23 consecutive months, according to official data.
The outlook for gold also remains bullish among some market participants. Delegates at the London Bullion Market Association’s annual conference in Italy forecast that gold could reach $5,013 an ounce over the next 12 months.
Meanwhile, the International Monetary Fund warned that the global economy continues to face risks from high energy prices, record levels of public debt and uncertainty surrounding the boom in artificial intelligence investment.
Silver prices in Pakistan also moved lower on Wednesday, falling Rs100 to Rs6,488 per tola.
In international markets, spot silver declined 2.2 percent to $60.36 per ounce. Platinum fell 3 percent to $1,650.45, while palladium dropped 2.7 percent to $1,140.89.
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