Gold prices drop in Pakistan as global market weakens

ISLAMABAD: Gold prices fell in Pakistan on Monday in line with losses in the international market, as a stronger US dollar and inflation concerns weighed on investor sentiment after US-Iran peace talks collapsed over the weekend.

According to figures issued by the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold in the local market declined by Rs1,600 per tola to close at Rs495,362. The price of 10 grams of gold also moved lower, falling by Rs1,371 to Rs424,693.

In the global market, spot gold was down 0.8% at $4,711.24 per ounce as of 11:36 am ET after touching its lowest level since April 7 earlier in the session. US gold futures also recorded a decline of 1.1% to $4,733.40 per ounce, according to Reuters.

Market participants linked the downward movement mainly to the strengthening of the US dollar. A firmer dollar makes commodities priced in the US currency, including gold, more expensive for buyers using other currencies, which in turn reduces demand. Persistent inflation concerns also affected sentiment, as they clouded expectations of near-term interest rate cuts by the US Federal Reserve.

Interactive Commodities Director Adnan Agar said gold started the day on a weaker note amid geopolitical tensions but later recovered some ground during trading.

He said the market opened at around $4,670, slipped to a low of $4,664, and later rose to a high of $4,744. At the time of his comments, it was hovering near $4,710.

Silver prices in the domestic market also registered a decline. The price of silver per tola fell by Rs130 to Rs7,934, reflecting a drop of more than 2% in global silver prices.

Analysts said bullion market trends in the coming days are likely to remain influenced by geopolitical developments, particularly tensions involving Iran, as well as currency movements and the inflation outlook.

Meanwhile, the Pakistani rupee posted a marginal gain against the US dollar in the inter-bank market on Monday. The rupee closed at 279 against the dollar, compared with 279.01 on Friday.

Local and global factors weigh on bullion market

As per details, both domestic and international bullion markets remained under pressure during the day. The decline in local gold prices followed weakness in overseas markets, where investors assessed the impact of geopolitical uncertainty, dollar strength and inflation-related concerns on the outlook for precious metals.

The latest movement comes as traders continue to monitor international developments closely, with gold and silver prices reacting to shifts in global sentiment as well as changes in currency markets.