Gold eases despite global price recovery
Gold prices in Pakistan declined on Friday even as international rates posted modest gains, reflecting a lagged impact amid global uncertainty over oil prices and monetary policy.
According to rates shared by the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola settled at Rs427,436 after dropping Rs4,600 during the day. The 10-gram rate stood at Rs366,457, down Rs3,944. On Thursday, the per-tola price had closed at Rs432,036 following a decline of Rs1,800. Silver prices also weakened, falling by Rs61 to Rs6,309 per tola.
In the international market, spot gold rose 0.6% to $4,073.23 per ounce by 11:50 am EDT (1550 GMT), as per Reuters. The metal had fallen about 2% in the previous session but remained up 1.4% for the week, supported by "dip buying" earlier in the period. US gold futures for August delivery also increased 0.6% to $4,075.90.
The local downturn occurred despite the international uptick. Brent crude retreated from levels above $100 a barrel, easing some pressure on inflationary expectations. Investors continued to weigh developments in the Middle East conflict and their potential impact on energy costs and broader inflation ahead of the US Federal Reserve's rate decision next week.
Market participants are closely monitoring the Fed meeting for policy signals. Traders currently assign a high probability to a rate hike in September, a factor that typically influences demand for non-yielding assets such as gold.
Regional trading patterns showed mixed demand. In India, dealers quoted discounts of up to $56 per ounce as buying remained subdued after an earlier rebound in prices deterred purchasers. Domestic gold in India traded around 141,800 rupees per 10 grams on Friday, after climbing to 146,000 rupees earlier in the week.
In China, gold was trading at a premium of $3 to $6 per ounce, indicating relatively firmer interest in the world's largest consumer. With global attention fixed on oil price volatility and the upcoming US policy decision, gold remains sensitive to shifts in risk sentiment and inflation outlook.
Oil prices climbed back above $100 a barrel for the first time since May after Yemen's Houthis struck two Saudi oil tankers in the Red Sea, extending the Middle East conflict to a second major shipping chokepoint.
Analysts note that sustained declines in crude oil could ease cost pressures, while any escalation in geopolitical tensions or unexpected monetary tightening may reverse recent local softness. Market participants will watch both international cues and local trading volumes in the coming sessions for clearer direction.
Meanwhile, the Pakistani rupee extended its marginal gains on Friday, closing at 277.87 against the US dollar in the inter-bank market, a rise of Rs0.03, or 0.01%. On Thursday, it had settled at 277.90.
Globally, the dollar strengthened as US Treasury yields rose and hovered near a 40-year high against the yen. The move was driven by a spike in oil prices and renewed concerns over a global trade war that raised inflation risks.
Sterling traded around a three-week low at $1.3313 in early Asia trade after sliding nearly 0.5% overnight. The euro also weakened to $1.1376, finding little support from expectations of the European Central Bank's rate hikes. The dollar index held near a three-week high against a basket of currencies at 101.45.