Gold plunges by Rs4,300 amid global decline

Rupee remains largely stable at Rs277.75/$ while greenback recoils from its two-year high

KARACHI:

After a week of rallying, gold prices saw a significant drop on Monday, reflecting global trends. In Pakistan, the precious metal fell by Rs4,300, settling at Rs278,400 per tola (11.66 grams). The All Pakistan Sarafa Gems and Jewellers Association attributed the decline to international developments, adding that gold had reached an all-time high of Rs287,900 per tola just last month.

On the international front, gold prices decreased by $43 to $2,672 per ounce (31.10 grams). Spot gold dropped 1% to $2,686.73 per ounce after slipping 2% earlier in the session. US gold futures mirrored this trend, losing 0.9% to $2,688.40.

This decline came as investors took profits following a five-session rally that had pushed prices to a three-week high. The announcement of Scott Bessent as the new US Treasury Secretary also affected gold's safe-haven appeal.

UBS analyst Giovanni Staunovo said the pullback was driven by two primary factors: profit-taking after last week's solid rally and optimism around Bessent's nomination.

Gold is traditionally considered a safe investment during times of economic and political uncertainty. However, Bessent's nomination came as relief to some strategists who believe he understands markets and his appointment could reduce the chance of severe tariffs on US trade partners, thus, reducing the need to for safe-haven investments like gold.

Rupee holds ground

The Pakistani rupee remained stable on Monday, closing at Rs277.75 against the US dollar in the interbank market, a minor improvement from Rs277.76 on Friday, according to State Bank of Pakistan (SBP) data. The currency experienced a slight decline of Rs0.09 or 0.03% last week, largely attributed to external oil payment obligations.

Globally, the US dollar recoiled from its two-year highs as US Treasury yields experienced a sharp decline. Yields on 10-year Treasuries fell over 11 basis points to below 4.3%, following the announcement of Scott Bessent as the incoming US Treasury Secretary. The bond market welcomed Bessent's nomination, viewing him as a fiscally conservative Wall Street veteran likely to support stable economic policies. Two year yields also fell.