Gold prices fell in Pakistan on Monday, with the price of one tola dropping by Rs2,100 as the precious metal lost ground in the international market.
According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), gold was priced at Rs439,936 per tola after the latest decline. The price of 10-gram gold also fell by Rs1,800 to Rs377,174.
The drop came after gold prices rose on Saturday, when one tola gained Rs1,100 to reach Rs442,036.
Silver prices also moved lower. The price of silver fell by Rs23 to Rs6,532 per tola in the local market.
Why are gold prices falling?
Gold prices came under pressure in international markets on Monday as a strong US dollar weighed on the metal and investors awaited key US inflation figures.
International gold rates fell by $21 to $4,174 per ounce, according to local market data. Spot gold was down 0.4 percent at $4,176.86 per ounce by 9:11 GMT, after touching its highest level since October 2 earlier in the session. US gold futures for December delivery also fell 0.4 percent to $4,200.90 per ounce.
Ricardo Evangelista, director and chief executive of ActivTrades, said the dollar’s strength and caution ahead of US inflation data were weighing on gold.
The US Consumer Price Index (CPI) report is due on Wednesday, followed by the Producer Price Index (PPI) and retail sales figures on Thursday. These reports could influence expectations about the Federal Reserve’s next interest rate moves.
Stronger-than-expected inflation could increase expectations of higher interest rates, potentially lifting the dollar and Treasury yields. That could make gold less attractive to investors because the metal does not pay interest.
Softer inflation figures, however, could ease those concerns and offer some support to gold prices.
Investors are also watching developments in the Middle East, which have kept markets cautious. Meanwhile, oil prices slipped on Monday amid expectations of increased Russian supplies after US President Donald Trump said Russia and Ukraine had agreed to stop attacks on each other’s energy facilities.
Elsewhere in the precious metals market, spot silver fell 0.3 percent to $60.62 per ounce. Platinum slipped 0.2 percent to $1,684.71, while palladium edged up 0.1 percent to $1,149.20 per ounce.