Gold prices in Pakistan continued their downward move on Tuesday, following another drop in international markets as expectations of higher US interest rates reduced demand for the precious metal.
According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold fell by Rs4,100 per tola, bringing it down to Rs424,836. The price of 10 grams also declined by Rs3,515 to Rs364,228.
The latest drop came a day after gold lost Rs2,300 per tola, when it settled at Rs428,936. The back to back declines reflect the weakness seen in global bullion prices.
In the international market, gold dropped by $41 to $4,024 per ounce, including a premium of $20. The decline in overseas prices continued to weigh on Pakistan’s local gold market.
Silver, however, moved in the opposite direction. Its price increased by Rs25 per tola, reaching Rs6,349 in the local market.
Gold prices remained under pressure globally, falling more than 1 percent on Tuesday as investors continued to pull back from the safe haven asset.
Spot gold slipped to $3,975.04 per ounce during early trading, while US gold futures for August delivery dropped to $3,988.60. The metal has lost more than 12 percent so far in June, putting it on course for its biggest monthly decline since October 2008. It is also expected to post its first quarterly loss since 2024 and its weakest quarter since mid-2013.
Analysts said easing concerns over conflict in the Middle East have shifted attention back to inflation and monetary policy in the United States.
Edward Meir, an analyst at Marex, said high inflation, expectations of higher interest rates and a stronger US dollar are outweighing the factors that would normally support a rise in gold prices.
Although gold is widely seen as a store of value during periods of inflation, higher interest rates reduce its appeal because it does not offer any yield.
Markets are now expecting the US Federal Reserve to raise interest rates three times this year. Traders are also pricing in a roughly 64 percent chance of another increase in September, according to the CME FedWatch Tool. Investors are waiting for fresh US employment data later this week, including the ADP jobs report and nonfarm payrolls, for further clues about the central bank’s next move.
The stronger US dollar also added pressure on bullion by making gold more expensive for buyers using other currencies.
Christopher Wong, a precious metals strategist at OCBC, said gold is unlikely to regain momentum unless real bond yields fall, the US dollar weakens or expectations of aggressive Federal Reserve policy begin to ease.
Other precious metals also remained under pressure. Spot silver fell 1.6 percent, platinum edged lower by 0.5 percent, while palladium gained 0.5 percent. Despite the slight rise in palladium, all three metals were still heading for monthly and quarterly losses.
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