Gold plunges below Rs450k

Steepest daily drop on record as safe-haven tumbles over 8% globally

KARACHI:

Gold prices in Pakistan witnessed a historic single-day decline on Monday, as the market slumped below the Rs450,000 mark, tracking a sharp correction in international markets after geopolitical tensions eased following remarks by Donald Trump about postponing planned military strikes against Iranian energy infrastructure.

In the local market, the price of gold per tola plunged by Rs43,600 to settle at Rs447,762, marking one of the steepest daily drops on record, according to data released by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10-gram gold fell to Rs383,883, down Rs37,380. Silver prices also followed the downward trend, declining by Rs800 to Rs6,884 per tola.

The sharp fall came in response to volatility in global bullion markets, where spot gold initially dropped more than 8% to a session low of $4,097.99 per ounce before recovering partially. By midday trading, it was down 0.4% at $4,470.36 per ounce.

Analysts noted that the metal had already posted its worst weekly performance since 1983, reflecting aggressive liquidation and shifting macro expectations.

Market sentiment turned abruptly after Trump indicated that the United States had engaged in "productive" talks with Iran and ordered a temporary halt to potential strikes on Iranian power plants and energy facilities for five days, contingent on ongoing diplomatic progress. The development triggered a sharp decline in oil prices, which in turn reduced safe-haven demand for gold.

According to international commodities analysts, the earlier sell-off was driven by expectations of prolonged higher interest rates, which typically weigh on non-yielding assets like gold. However, the geopolitical shift amplified the correction, causing synchronised declines across commodities, equities, and energy markets.

Local market experts said the sudden reversal reflects the sensitivity of gold to geopolitical headlines. Adnan Agar, Director at Interactive Commodities, noted that gold experienced extreme intra-day volatility, falling to as low as $4,097 before rebounding to around $4,470. He added that while diplomatic signals between the US and Iran may ease immediate tensions, uncertainty remains high.

"Markets are reacting to expectations of reduced conflict intensity, but the situation is still fluid. Any breakdown in talks could quickly reverse the trend," he said, adding that further downside in gold prices remains possible if key support levels are breached.

He highlighted that the $4,000 level remains critical, and a sustained break below this threshold could push prices towards $3,800 in the near term. Analysts broadly expect continued volatility in global commodities, particularly as geopolitical developments, interest rate expectations, and currency movements remain in a state of flux.