Gold prices in Pakistan moved lower on Tuesday, following a decline in international markets as a stronger US dollar and rising Treasury yields reduced demand for the precious metal ahead of fresh signals from the US Federal Reserve.
According to the All Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of 24 karat gold dropped by Rs2,500 per tola to Rs434,936. The price of 24 karat gold per 10 grams also fell by Rs2,143 to Rs372,887, while 22 karat gold was available at Rs341,825 per 10 grams.
Silver prices also recorded losses in the local market. The price of 24 karat silver declined by Rs120 to Rs6,559 per tola, while the rate for 10 grams slipped by Rs103 to Rs5,623.
The decline in Pakistan largely reflected the weaker trend in global bullion markets, where investors remained cautious before the release of minutes from the US Federal Reserve’s June policy meeting on Wednesday. The document is expected to provide fresh insight into the central bank’s thinking on interest rates under its new chair, Kevin Warsh.
In the international market, spot gold was trading near $4,126 per ounce during early trade, down about 0.9 percent. US gold futures for August delivery also slipped to around $4,138 per ounce.
Market analysts said the latest decline appeared to be a correction after gold’s recent gains rather than the start of a new downward trend.
Matt Simpson, a senior analyst at StoneX, said the metal was giving back part of last week’s advance in the absence of a major market trigger and during a period of relatively thin trading activity. He noted that such pullbacks are common after a strong rebound.
The stronger US dollar also added pressure to gold prices by making the metal more expensive for buyers using other currencies. At the same time, yields on the benchmark 10 year US Treasury note climbed to their highest level in two weeks, reducing the appeal of non interest bearing assets such as gold.
Nicholas Frappell, global head of institutional markets at ABC Refinery, said investors were largely waiting for the Fed minutes to better understand the outlook for short term interest rates.
Meanwhile, traders have lowered expectations of a September interest rate increase after weaker than expected US jobs data last week. Market pricing now suggests around a 56 percent chance of a rate hike, compared with more than 60 percent before the employment figures were released.
