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Gold prices declined sharply in Pakistan on Monday, with the price of 24-karat gold falling Rs12,800 per tola to Rs438,136.
The decline followed a major drop in international bullion prices. Gold fell by $128 per ounce to around $4,156, according to rates issued by the All Pakistan Sarafa Gems and Jewellers Association.
The price of 10 grams of gold also declined by Rs10,973 to Rs375,631.
Silver prices moved lower as well.
The price of silver fell Rs325 per tola to Rs6,578. The price of 10 grams declined by Rs279 to Rs5,639.
Gold prices fell about 3% in the international market on Monday.
Spot gold dropped to around $4,156.45 per ounce, reaching its lowest level since August 5.
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US gold futures for December delivery also declined by about 3.1%.
A stronger US dollar added pressure to bullion prices. Rising US Treasury yields also increased the opportunity cost of holding gold, which does not generate interest.
Gold had already been under pressure in recent sessions as markets assessed the outlook for US monetary policy.
Higher oil prices have added another challenge for gold markets.
Brent crude prices rebounded after US President Donald Trump rejected an Iranian proposal linked to resolving the conflict and reopening the Strait of Hormuz.
Higher energy costs can increase inflation pressures across the global economy.
That can strengthen expectations for higher interest rates. Higher rates and yields can reduce the appeal of non-yielding assets such as gold.
UBS analyst Giovanni Staunovo said higher oil prices and expectations of further US rate increases were among the main factors behind gold’s recent weakness.
Investors are closely monitoring expectations for further Federal Reserve rate increases.
The market is also awaiting several important US economic reports this week.
These include job openings, the ADP employment report, personal consumption expenditures data and nonfarm payrolls.
The reports could influence expectations for future US monetary policy and, in turn, affect gold prices.
Other precious metals also recorded significant declines.
Spot silver fell 4.8% to around $61.17 per ounce.
Platinum declined 2.4% to $1,735.88, while palladium fell 2.2% to $1,239.60.
The latest decline adds to the volatility seen in Pakistan’s bullion market during September. Domestic gold prices have also been responding closely to movements in international bullion prices.
For Pakistani buyers and investors, further movements in global gold prices, the US dollar and the rupee could continue to influence local bullion rates.
[…] Gold Price Falls Rs12,800 Per Tola in Pakistan […]