Gold hits four-month low, prices fall sharply in Pakistan

KARACHI: Gold prices in Pakistan fell sharply on Monday, tracking a steep decline in international markets where bullion hit its lowest level in four months, according to a report by Dawn.

In the local market, the price of gold per tola dropped by Rs8,100 to Rs491,362, while the price of 10 grams fell by Rs6,945 to Rs421,263.

Internationally, spot gold declined as much as 6.3 per cent to $4,203.21 per ounce, after earlier sliding more than 8 per cent in the session to its lowest level since November 24. The metal has now extended losses into a ninth straight session.

Gold has come under sustained pressure after logging its biggest weekly loss in about 43 years last week, falling more than 10 per cent. Prices are also down roughly 25 per cent from their record high of $5,594.82 per ounce reached in January.

Analysts said the decline was driven by rising inflation concerns linked to the ongoing Middle East conflict and shifting expectations of global monetary policy.

“With the Iranian conflict into its fourth week, and oil prices hovering around $100, expectations have pivoted from rate cuts to potential rate hikes, which have tarnished gold’s appeal,” said Tim Waterer, chief market analyst at KCM Trade.

Tensions in the region escalated after Iran warned it could target energy and water infrastructure in Gulf countries if Donald Trump follows through on threats to strike Iran’s power grid.

Higher oil prices — with crude staying above $110 per barrel — have added to inflationary pressures, raising the likelihood of tighter monetary policy. While gold is traditionally seen as a hedge against inflation, higher interest rates reduce the appeal of the non-yielding asset.

Market expectations have shifted accordingly, with investors increasingly pricing in the possibility that the US Federal Reserve could raise interest rates rather than cut them by the end of 2026.

Other precious metals also declined. Silver prices in Pakistan fell by Rs50 per tola to Rs7,684, while 10 grams dropped by Rs43 to Rs6,587. In international markets, spot silver fell 6.1 per cent, platinum slipped 6.4 per cent, and palladium lost 3.6 per cent.

Analysts said continued volatility in global markets, combined with a stronger US dollar and tightening financial conditions, could keep pressure on gold prices in the near term.