KARACHI: Gold prices continued their downward trend in Pakistan on Friday, tracking a decline in the international bullion market, where prices touched a three-month low amid rising oil prices and concerns over inflation.
The price of 24-karat gold fell by Rs7,000 per tola to Rs424,536, according to rates issued by the All Pakistan Sarafa Gems and Jewellers Association.
Similarly, the price of 10 grams of 24-karat gold declined by Rs6,001 to Rs363,971.
In the international market, gold prices dropped by $70 to $4,020 per ounce, the association reported.
Silver prices also declined in the domestic market, falling by Rs2,210 per tola to Rs5,865.
Internationally, gold hit a three-month low earlier on Friday and was heading towards its steepest weekly decline since June, as rising oil prices weighed on the non-yielding precious metal.
Higher energy costs can fuel inflation and strengthen expectations that central banks will maintain tighter monetary policies, reducing the appeal of gold, which does not offer interest or dividends.
“The rise in oil prices would reduce the relative attractiveness of investing in and holding gold,” Hamad Hussain, a climate and commodities economist at Capital Economics, said.
Oil prices rise as supply concerns linger amid Houthi attacks on Saudi Arabia
Brent crude touched a more than five-month high on Friday after Houthi attacks in Saudi Arabia raised concerns about further disruptions to energy supplies.
Despite its traditional role as a safe-haven asset, gold has faced pressure amid market volatility and uncertainty surrounding the Iran war, elevated energy prices, artificial intelligence-related technology stocks and rising government debt.
Investors are awaiting US Personal Consumption Expenditures (PCE) inflation data, the Federal Reserve’s preferred inflation gauge, scheduled for October 29, for further indications of progress towards its 2% inflation target.
Among other precious metals, spot silver fell 1.2% to $53.8882 per ounce, while palladium declined 0.3% to $1,051.06 per ounce. Spot platinum dropped 0.8% to $1,557.03 per ounce, reaching its lowest level since July.