Gold prices in Pakistan fell sharply on Monday amid pressure on international bullion markets from rising oil prices and stronger-than-expected US inflation data. The price of gold declined by Rs3,800 per tola.

Gold dropped to Rs453,336 per tola from Rs457,136 on Saturday, the All-Pakistan Gems and Jewelers Sarafa Association said. 10-gram gold also eased to Rs388,662, down by Rs3,258. Silver prices fell Rs122 per tola to Rs6,802, continuing the downward trend.

Local prices fell as international spot gold fell 1.8% to $4,271.59 an ounce and US gold futures fell 2.2% to $4,311.20.

Oil prices surged more than 4% fuelling fears of inflation and adding to market pressure. US inflation numbers came in stronger than expected further cementing expectations that the US Federal Reserve could raise interest rates at its next policy meeting.

Higher interest rates typically put pressure on gold because they can make interest-bearing assets more appealing to investors.

Gold fell briefly to around $4,255 an ounce, but recovered to around $4,310, said Adnan Agar, director at Interactive Commodities. “The Fed’s decision and tone will be key for gold’s next move,” he said.

For Pakistani investors and gold buyers, the coming days could therefore remain highly volatile, with global monetary policy likely to determine whether prices recover or fall further.

Credit: Independent News Pakistan (INP)