Gold prices in Pakistan fell on Monday, tracking a decline in the international market as investors reacted to global economic signals and rising energy costs.
In the local market, the price of gold dropped by Rs1,800 per tola, bringing the new rate to Rs522,762. The price of 10 grams of gold also moved lower, falling by Rs1,543 to Rs448,184, according to rates released by the All Pakistan Gems and Jewellers Sarafa Association.
The drop comes just two days after a sharp fall on Saturday, when gold per tola declined by Rs8,700 to settle at Rs524,562.
Jewellers say local prices usually follow the direction of the international market, which has seen some volatility in recent days.
Global market under pressure
In the global market, gold slipped as investors grew less hopeful about early interest rate cuts in the US. Higher energy prices are raising concerns about inflation, which may push the US central bank to keep interest rates higher for longer.
Spot gold was trading near $5,007 per ounce during early hours of trading, while US gold futures for April delivery were around $5,011 per ounce.
At the same time, the US dollar edged slightly lower. A weaker dollar normally supports gold because it makes the metal cheaper for buyers using other currencies.
Yields on US 10 year Treasury bonds also eased, which slightly improved the appeal of gold. Unlike bonds, gold does not offer interest, so its demand often rises when bond yields fall.
Market analysts say the metal may continue to see mixed movements in the short term. Investors are closely watching the US Federal Reserve, which is expected to announce its latest policy decision later this week. The central bank is widely expected to keep interest rates unchanged for a second meeting.
Global tensions are also shaping market sentiment. Oil prices remained above $100 per barrel as the US Israeli war against Iran entered its third week, raising fears of supply disruptions. Higher oil prices can push inflation higher, adding another layer of uncertainty for financial markets.
Meanwhile, silver prices in Pakistan also declined. The price of silver fell by Rs100 to Rs8,441 per tola in the local market.
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