Gold prices in Pakistan witnessed a sharp decline on Wednesday, mirroring a steep fall in the international market, as global uncertainty and shifting interest rate expectations kept investors on edge.
In the local market, the price of gold per tola dropped by Rs12,627 to settle at Rs442,436, according to rates shared by the All Pakistan Gems and Jewellers Sarafa Association. The price of 10 grams of gold also fell by Rs11,364, closing at Rs378,170.
Just a day earlier, gold had climbed to Rs455,063 per tola after gaining Rs2,830, highlighting the ongoing volatility in the bullion market.
Silver also moved lower, with prices declining by Rs385 per tola to reach Rs6,929.
Global pressure weighs on bullion
The downturn in Pakistan was driven largely by weakness in international markets, where gold slipped more than 2 percent to touch a fresh two-month low.
Spot gold fell to $4,172.44 per ounce, its lowest level since late March, while US gold futures for August delivery also dropped 2.1 percent to $4,195.60 per ounce.
Analysts said renewed geopolitical tensions and concerns over inflation are shaping market sentiment, but expectations of higher interest rates are limiting gold’s appeal.
According to FXTM senior research analyst Lukman Otunuga, gold is facing pressure despite heightened risk sentiment. He noted that renewed hostilities involving the US and Iran have complicated efforts to ease conflict, while inflation risks continue to influence investor behaviour.
Reports of missile and drone strikes by Iran’s Revolutionary Guards on US-linked military positions in Jordan, Kuwait and Bahrain further added to global unease, marking one of the most serious escalations since a ceasefire agreement earlier this year.
Gold has lost more than 20 percent since tensions in the region escalated earlier this year, even as it typically performs well during times of uncertainty. However, higher interest rate expectations have reduced demand for non-yielding assets like bullion.
Markets are now pricing in a 68 percent chance of a US rate hike in December, according to CME FedWatch data.
Investors are also awaiting key US inflation figures, with the Consumer Price Index expected later in the day and Producer Price Index data due on Thursday.
These readings are likely to influence the Federal Reserve’s next policy move following stronger-than-expected jobs data last week, which has already increased rate hike expectations.
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