Gold price falls Rs12,800 per tola in Pakistan

Gold tumbles 3% in global market to hit more than seven week low

Gold prices registered a sharp decline in the local market on Monday, with the price of gold per tola dropping by Rs12,800 after a substantial fall in international bullion prices.

In the international bullion market, gold declined by $128 per ounce to settle at $4,156 per ounce.

According to rates issued by the All Pakistan Sarafa Gems and Jewelers Association, the price of gold per tola fell to Rs438,136, while the price of 10 grams decreased by Rs10,973 to Rs375,631.

Silver also recorded a decline in the domestic market, with its price per tola falling by Rs325 to Rs6,578. The price of 10 grams of silver dropped by Rs279 to Rs5,639.

Gold prices fell 3%, reaching their lowest level in more than seven weeks, as rising oil prices increased inflation concerns and strengthened expectations for higher interest rates.

Spot gold was down 3% at $4,156.45 per ounce as of 0814 GMT, touching its lowest level since August 5. US gold futures for December delivery declined 3.1% to $4,188.80.

The dollar remained firm, making bullion priced in the greenback more expensive for holders of other currencies, while US Treasury yields continued to rise.

“Higher oil prices and the increased probability of further US rate hikes being priced in by market participants are the main drivers behind gold’s recent weakness,” UBS analyst Giovanni Staunovo said.

He added that the situation could keep US real yields and the dollar elevated, increasing the opportunity cost of holding non-yielding gold and contributing to further short-term volatility in the precious metal.

Brent crude oil prices recovered after US President Donald Trump rejected a peace proposal from Iran aimed at resolving their conflict and reopening the Strait of Hormuz, keeping tensions in the Middle East elevated. Higher energy costs generally fuel inflation by increasing prices across the economy.

According to CME’s FedWatch Tool, traders now see a 70.3% probability of a Fed rate hike in October. The US central bank raised rates by a quarter percentage point earlier this month and signalled that further increases could follow.

Cleveland Fed chief Beth Hammack said on Friday that she was concerned persistent inflation could lead the American public to view higher prices as normal, stressing that the central bank could not allow such a situation to develop.

Markets are now focused on several US economic data releases due this week, including job openings, the ADP employment report, Personal Consumption Expenditures (PCE) data and nonfarm payroll figures.

Among other precious metals, spot silver declined 4.8% to $61.17 per ounce, while platinum dropped 2.4% to $1,735.88 and palladium fell 2.2% to $1,239.60.