Gold prices fall sharply in Pakistan amid global market sell-off

KARACHI: Gold prices in Pakistan fell sharply on Wednesday, with the price of 24-carat gold dropping Rs11,300 per tola to Rs454,036, according to the All Pakistan Gems and Jewellers’ Sarafa Association (APGJSA).

The price of 10-gram gold also declined by Rs9,688 to Rs389,262.

The latest drop came a day after gold had already fallen by Rs800 per tola.

On Tuesday, the precious metal was priced at Rs465,336 per tola, meaning the local market has recorded a cumulative decline of Rs11,300 over the past two sessions.

The correction in domestic prices came amid another sharp fall in international bullion markets.

Internationally, spot gold was trading around $4,303 per ounce on Wednesday, down about 0.6 per cent, according to Reuters, after touching its lowest level in more than three weeks. US gold futures for December delivery were down around 1 per cent at $4,351 per ounce.

The international decline was driven by a stronger US dollar and growing expectations of higher interest rates as escalating tensions in the Middle East pushed oil prices higher and raised concerns about inflation.

Investors are also awaiting key US economic data, including the August jobs figures, for clues about the Federal Reserve’s monetary policy.

Gold had already come under pressure in recent sessions after comments from Federal Reserve officials increased expectations that interest rates could remain higher for longer.

A stronger dollar and higher interest-rate expectations tend to weigh on gold, which does not offer a yield.

The Pakistani bullion market generally tracks international gold prices, while domestic rates are also influenced by the rupee-dollar exchange rate and local demand.

The latest decline extends a sharp correction in local gold prices.

On Monday, gold had dropped Rs1,800 per tola, followed by another Rs800 decline on Tuesday.