Gold prices in Pakistan moved lower on Friday, tracking a sharp fall in the international market as global economic signals weighed on bullion demand.
In the local market, the price of gold per tola dropped to Rs476,862 after a decline of Rs15,500 during the day, according to rates shared by the All-Pakistan Gems and Jewellers Sarafa Association. The price of 10-gram gold also fell, settling at Rs408,832 after a reduction of Rs13,289.
This follows a stronger session on Thursday when gold per tola had climbed to Rs492,362, gaining Rs1,000 in a single day before reversing course.
Silver also moved downward in the local market. The per tola rate slipped by Rs972 to reach Rs8,232.
In the global market, gold prices extended losses as rising US Treasury yields and a firmer US dollar reduced demand for the safe-haven asset. Spot gold dropped 2.2 percent to $4,546.45 per ounce, touching its lowest level since early May and putting it on track for a weekly decline of around 3.6 percent. US gold futures for June delivery also weakened, falling 2.9 percent to $4,550.80.
Market pressure increased after benchmark 10-year US Treasury yields climbed to their highest level in nearly a year. Higher yields tend to reduce the appeal of gold since it does not offer any return. At the same time, the stronger dollar made gold more expensive for buyers using other currencies.
Analysts linked the rise in yields and the dollar to growing inflation concerns, partly driven by ongoing tensions in the Middle East and recent US inflation data. Higher oil prices have added to those worries, with Brent crude rising sharply this week and holding above $109 per barrel as supply risks persist.
Rising energy costs are also seen as a factor that could keep inflation elevated, pushing central banks to maintain higher interest rates for longer. This environment typically puts pressure on gold, which tends to perform better when interest rates are low.
Traders have also largely scaled back expectations of US rate cuts this year, according to market tracking tools, further dampening sentiment for non-yielding assets like gold.
Silver, platinum and palladium also came under pressure in international trade, with all three metals heading for weekly losses as investors moved away from precious metals amid stronger economic signals from the US.
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