Gold prices dropped in Pakistan on Thursday, following a decline in the international market as investors reacted to global economic signals and geopolitical tension.
In the local market, the price of gold fell sharply by Rs5,200 per tola, bringing it down to Rs493,762. The price of 10 grams also saw a notable drop of Rs4,458, settling at Rs423,321, according to figures released by the All Pakistan Gems and Jewellers Sarafa Association.
A day earlier, gold had already moved lower, with the per tola rate recorded at Rs498,962 after a fall of Rs1,200.
Global pressures weigh on gold
Internationally, gold prices came under pressure and declined by $52 to $4,714 per ounce, including a premium of $20. Spot gold was trading around $4,696 per ounce, while US gold futures for June delivery also moved lower.
Market analysts linked the decline to a stronger US dollar and rising bond yields, which tend to reduce the appeal of gold as it does not offer returns like interest bearing assets. When the dollar gains value, gold becomes more expensive for buyers using other currencies, leading to lower demand.
At the same time, oil prices climbed above $100 per barrel amid ongoing tensions linked to stalled talks between the US and Iran. Reports of fresh disruptions in the Strait of Hormuz added to market uncertainty and pushed energy prices higher.
Higher oil prices can increase inflation risks, which usually supports gold. However, expectations that interest rates may remain high for a longer period have limited that support, as investors often move towards assets that provide better returns in a high rate environment.
A recent survey of economists suggested that the US Federal Reserve may delay interest rate cuts for several months due to inflation concerns driven by rising energy costs.
Despite the current dip, some analysts believe gold could still move higher in the longer term, especially if inflation pressures remain and global uncertainty persists.
Meanwhile, silver prices in Pakistan also moved down, falling by Rs225 per tola to reach Rs8,099.
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