Gold prices in Pakistan dropped sharply on Tuesday, giving back much of the previous session’s gains as international bullion prices came under pressure from a stronger US dollar and growing caution ahead of the US Federal Reserve’s policy decision.
According to the All Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold fell by Rs4,300 per tola to Rs427,436 in the local market.
The price of 10 grams of gold also declined by Rs3,687, settling at Rs366,457.
The latest decline follows Monday’s rally, when gold had climbed by Rs4,000 per tola to close at Rs431,736.
In the international market, gold prices also moved lower. The global bullion rate dropped by $43 to $4,050 per ounce, including a $20 premium, which weighed on local prices.
Silver also followed the downward trend. The price of silver in Pakistan fell by Rs174 per tola to Rs6,223.
Internationally, spot gold was down 0.7 percent at $4,045.89 per ounce during early trading, while US gold futures for August delivery slipped 0.8 percent to $4,046.20.
Market analysts said the stronger US dollar was one of the key reasons behind the fall, as it makes gold more expensive for buyers using other currencies, reducing demand for the precious metal.
Investors are also waiting for the outcome of the Federal Reserve’s two day policy meeting, which concludes on Wednesday. Markets are looking for fresh guidance on the future path of US interest rates, a key factor that often drives gold prices.
Analysts noted that gold has remained trapped within a broad trading range in recent weeks as traders wait for clearer signals from the central bank.
Current market expectations suggest the Fed is more likely to keep interest rates unchanged this week, although the chances of another rate increase in September have increased significantly compared with a week ago.
Adding to market uncertainty, US President Donald Trump again urged the Federal Reserve to cut interest rates, while also saying Washington was making progress in talks with Iran, though he warned military action could resume if negotiations failed.
Analysts believe that if the Fed adopts a less aggressive tone and signals that further rate hikes are unlikely, gold could regain momentum and move back above the $4,200 per ounce level.
