Gold drops Rs2,400 per tola as international prices retreat

Islamabad: Gold prices in Pakistan moved lower on Monday in line with a decline in the international bullion market, where the metal pulled back from a two-week peak under pressure from a stronger US dollar.

According to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold in the local market fell by Rs2,400 per tola to Rs437,436. The price of 10 grams of gold also declined by Rs2,058 to Rs375,030.

On Saturday, the per-tola rate had settled at Rs439,836 after registering a Rs1,100 decrease.

Global market signals weigh on bullion

The international market showed mixed trends as investors assessed signals from the US economy. Spot gold was down 0.8% at $4,143.12 per ounce by 12:02 pm ET (1602 GMT) after earlier touching its highest level since June 22. At the same time, US gold futures for August delivery were up 0.7% at $4,155.50 per ounce, according to Reuters.

Jim Wyckoff, a market analyst at American Gold Exchange, linked the pressure on gold to the movement of the US currency.

Even so, the decline in gold prices remained limited as weaker US labour market data eased expectations of an immediate aggressive interest rate increase by the Federal Reserve. Market participants are now pricing in a 57% chance of a rate hike in September.

Fed minutes in focus

The release of minutes from the Federal Reserve's meeting on Wednesday is expected to offer more direction on the central bank's policy path and could shape gold price movements in the coming sessions.

Bullion had recently drawn support from expectations of monetary easing, but renewed strength in the dollar prompted some profit-taking. Analysts also noted that gold continued to find backing from its safe-haven status amid geopolitical uncertainty and broader concerns about the global economy.

Meanwhile, the Pakistani rupee was largely steady in the inter-bank market at Rs278.11 against the US dollar, posting a marginal gain of one paisa from the previous close of Rs278.12.