Gold falls Rs2,400 as global rates retreat

Gold prices in Pakistan dropped on Monday, mirroring losses in the international market, where the precious metal retreated from two-week highs, pressured by a firmer US dollar, though limited declines reflected easing expectations of aggressive Federal Reserve rate hikes amid signs of a cooling US labour market.

In the local market, the price of gold per tola stood at Rs437,436 after falling by Rs2,400 during the day, according to rates released by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the 10-gram gold was traded at Rs375,030, down Rs2,058. On Saturday, the per-tola price had closed at Rs439,836 following a Rs1,100 decline. The drop comes as investors weighed mixed signals from the US economy. Spot gold fell 0.8% to $4,143.12 per ounce by 12:02 pm ET (1602 GMT), after touching its highest level since June 22. US gold futures for August delivery, however, rose 0.7% to $4,155.50 per ounce, as per Reuters.

"The US dollar index is a little higher today (Monday), and that is a daily bearish element (for gold)," said Jim Wyckoff, market analyst at American Gold Exchange. Despite pressure from the stronger dollar, losses were capped as softer US labour market data reduced the likelihood of an imminent aggressive rate hike by the Federal Reserve.

Market participants now see a 57% chance of a rate hike in September. The release of the Fed's minutes on Wednesday is expected to provide further clarity on the central bank's policy outlook, influencing gold's trajectory in the coming sessions.

The precious metal had gained ground recently on expectations of monetary easing, but renewed dollar strength prompted some profit-taking. Analysts note that gold remains supported by its safe-haven appeal amid ongoing geopolitical uncertainties and global economic concerns. Meanwhile, the Pakistani rupee held steady at Rs278.11 per US dollar in the inter-bank market, showing a marginal one-paisa appreciation from the previous close at Rs278.12.