Gold falls as global prices hit low

Loses Rs3,100 to Rs434,436 per tola; rupee inches up to 277.02/$

KARACHI:

Gold prices in Pakistan fell on Wednesday, tracking a decline in the international market, where the precious metal dropped to a two-month low as a stronger US dollar and elevated Treasury yields reduced demand for the non-yielding asset.

The price of gold per tola fell Rs3,100 to Rs434,436, according to rates shared by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10-gram gold declined Rs2,658 to Rs372,458. On Tuesday, gold had remained unchanged at Rs437,536 per tola.

The decline in the domestic market came as gold prices extended losses internationally, with investors turning cautious amid a stronger dollar and higher US Treasury yields. Internationally, spot gold fell 1.2% to $4,113.89 per ounce by 2:12 pm EDT (1812 GMT), after touching $4,066, its lowest level since August 5, according to Reuters. US gold futures for December delivery settled 1.1% lower at $4,140.70.

Other precious metals also came under pressure. Silver declined around 3%, while platinum dropped nearly 4%. Palladium also fell to its lowest level in more than a year. Adnan Agar, Director at Interactive Commodities, said gold had moved lower as expected, with the market recording a low of around $4,066 before recovering somewhat.

"Gold went down today (Wednesday)," Agar said, adding that the market was trading around $4,111, while the day's high was approximately $4,170. He said the market had been showing signs of slowdown and eventually followed that direction.

However, Agar said the outlook would depend on where gold closes. "If the closing comes below $4,100 again, the market will be in trouble," he said. According to him, a sustained close above the $4,100 level could keep open the possibility of a rebound towards $4,160-$4,180.

The latest decline in global gold prices reflects pressure from financial-market factors, particularly movements in the dollar and US government bond yields. Higher Treasury yields increase the opportunity cost of holding gold, while a stronger dollar makes the metal more expensive for holders of other currencies.

In Pakistan, the domestic gold market generally follows international bullion prices, with movements in the rupee-dollar exchange rate also influencing local prices.

Meanwhile, the price of silver fell Rs100 to Rs6,488 per tola in the local market. Furthermore, the Pakistani rupee extended its marginal gains, closing at Rs277.02 against the US dollar, up Rs0.03 from Tuesday's Rs277.05.