Gold tumbles Rs10,400 on global sell-off

KARACHI:

Gold prices in Pakistan witnessed a sharp decline on Tuesday, tracking losses in the international market where a stronger US dollar and rising expectations of a Federal Reserve interest rate hike dampened investor demand for the precious metal.

According to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold fell by Rs10,400 per tola to settle at Rs432,236 in the local market. Similarly, the price of 10-gram gold dropped by Rs9,360 to Rs368,985. The decline comes a day after gold had surged by Rs4,643 per tola, closing at Rs442,636 on Monday.

In the international market, spot gold fell 1.2% to $4,138.79 per ounce by 1545 GMT, while US gold futures for August delivery declined 1.1% to $4,156.40 per ounce, as per Reuters.

Market participants attributed the weakness to the US dollar strengthening to its highest level in more than a year, making gold more expensive for holders of other currencies and reducing its attractiveness as a safe-haven asset.

Analysts said progress in US-Iran talks and Washington's decision to waive certain oil-related sanctions on Iran also eased concerns over energy prices and inflation, reducing support for gold. Investors are now awaiting the release of US Personal Consumption Expenditures (PCE) data on Thursday for fresh clues about the Federal Reserve's monetary policy trajectory.

Commenting on market trends, Interactive Commodities Director Adnan Agar said gold remained under pressure throughout the trading session, touching an intraday high of $4,200 per ounce and a low of $4,090 before trading around the $4,130-$4,137 range. He noted that the market continues to show signs of weakness and could face further downside if key support levels are breached.

Meanwhile, silver prices in the domestic market also declined sharply, falling by Rs487 per tola to Rs6,664.

The rupee posted a marginal gain of Rs0.01 against the US dollar in the interbank market on Tuesday, closing at 278.21 against Monday's close of 278.22.