Gold prices in Pakistan dropped on Monday, tracking a decline in international rates as global markets reacted to inflation concerns and uncertainty over interest rates.
In the local market, the price of gold fell by Rs3,800 per tola, settling at Rs479,962. The rate for 10 grams also moved lower, dropping by Rs3,257 to reach Rs411,490, according to data released by the All-Pakistan Gems and Jewellers Sarafa Association.
This comes after a smaller drop on Saturday, when gold per tola had slipped by Rs200 to close at Rs483,762.
Global pressure weighs on prices
Internationally, gold prices also moved down, losing around $38 to reach $4,576 per ounce, including a premium of $20. In early trading, spot gold was seen edging lower, while US gold futures also declined.
Market activity remained limited as major financial centres in China, Japan and the UK stayed closed for holidays, leading to thinner trading volumes.
Analysts said the recent tone from the US Federal Reserve has kept pressure on gold. Concerns about inflation and the possibility of interest rates staying higher for longer have reduced the appeal of gold, which does not offer any yield.
Federal Reserve Chair Jerome Powell recently completed his term with rates unchanged, but with rising caution around inflation. Some policymakers have also signalled that rate cuts may not come soon, especially if energy prices continue to rise.
Higher oil prices, driven by tensions linked to the Iran conflict, are adding to these concerns. When borrowing costs stay elevated, investors often move away from gold and towards assets that offer returns.
Geopolitics adds to uncertainty
Developments in the Middle East also remain in focus. Oil prices are still holding above $100 per barrel, as uncertainty continues over a possible US-Iran agreement.
US President Donald Trump said efforts were under way to assist ships stuck in the Gulf, following reports of attacks on vessels in the Strait of Hormuz. At the same time, Iran is reviewing a proposal reportedly conveyed through Pakistan, keeping markets on edge.
Analysts believe gold may continue to move within a wide range in the coming months, depending on how inflation and geopolitical tensions evolve.
Meanwhile, silver prices in Pakistan also followed the downward trend, falling by Rs100 to Rs7,914 per tola.
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