Gold falls despite global gains

Down Rs500 per tola; silver rises; rupee edges up against dollar

KARACHI:

Gold prices declined in the local market on Tuesday even as international rates recovered, reflecting the usual lag with which global movements filter into Pakistan's bullion trade.

According to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola fell Rs500 to Rs427,936. The 10-gram rate dropped Rs428 to Rs366,886. A day earlier, the per-tola price had climbed Rs1,700 to Rs428,436.

The decline came after international gold weakened in the preceding sessions. Local dealers typically adjust rates with a delay once the impact of global moves becomes clear. In contrast, global gold advanced on Tuesday. Spot gold rose 0.6% to $4,078.10 an ounce by 09:29 am EDT, while US gold futures gained 1.1% to $4,134.60.

The international rebound was supported by a sharp drop in oil prices that eased inflation concerns and reduced expectations of further US rate hikes. Markets also waited for clearer signals on the Federal Reserve's policy path.

Silver moved in the opposite direction locally. Its price increased Rs60 to Rs6,351 per tola. Market participants described trading as subdued. Interactive Commodities Director Adnan Agar said gold was trading in a narrow band as the precious metal hit a high of $4,085 and a low of $4,042. "The market was very dead … It was standing at $4,063 and moving within a $40 range," he noted.

Agar added that the direction would likely emerge after the US monthly employment data due on Friday. "Gold has been stuck between roughly $4,250 and $3,950 for the half of June, all of July and into August. This range will break – possibly after Friday or next week."

Oil prices remained under pressure amid the continuing US-Iran standoff. Brent crude futures fell more than 4%, with recent lows near $77.60 a barrel. Agar said the market could test lower levels around $72 in the near term, though longer-term support was expected to hold.

He described the diplomatic situation as a series of short-term pauses rather than a lasting resolution, noting that the US mid-term election considerations in the coming months were also influencing the tone of negotiations.

Elsewhere in the precious metals complex, platinum and palladium both advanced more than 5%. Meanwhile, the Pakistani rupee closed marginally stronger against the US dollar in the inter-bank market on Tuesday. It settled at 277.76, a rise of one paisa from Monday's close at 277.77. Internationally, the dollar remained under pressure after yen-buying intervention and a fall in oil prices.