KARACHI: Gold prices extended their downward trend in Pakistan on Wednesday, tracking losses in international bullion markets as rising oil prices fuelled inflation concerns and reinforced expectations of tighter US monetary policy.
The price of 24-karat gold per tola fell by Rs900 to Rs434,536, 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 Rs772 to Rs372,544, while 10 grams of 22-karat gold fell by Rs707 to Rs341,511.
In the international market, gold prices dropped by $9 to $4,120 per ounce, the association reported.
Silver prices also declined locally, with the price per tola falling by Rs27 to Rs6,207. The price of 10 grams of 24-karat silver decreased by Rs23 to Rs5,321.
International silver prices fell by $0.27 to $57.29 per ounce, according to the association.
Rising energy costs have heightened concerns about persistent inflation, potentially limiting the US Federal Reserve’s ability to ease monetary policy.
“Gold has adhered to the downtrend that began 2 months ago,” said Han Tan, chief market analyst at Bybit.
Investors are also awaiting the US Personal Consumption Expenditures (PCE) price index data due next week. The Federal Reserve closely monitors the index as its preferred measure of inflation against its 2% target.
Stronger-than-expected consumer and producer inflation data released last week indicated that US price pressures remained elevated amid surging energy costs.
Oil prices rose by more than $1, with Brent crude futures holding above $110 a barrel as escalating tensions in the Middle East fuelled fears of supply disruptions.
Gold is traditionally regarded as a hedge against inflation and a safe-haven asset during periods of economic and geopolitical uncertainty. A weaker US dollar can also make the metal more affordable for buyers using other currencies, potentially supporting demand.
Read More: Oil rises on Middle East supply fears, US inventory drawdowns
However, traditional safe-haven assets have delivered mixed performance amid market volatility this year. Concerns over the Iran war, elevated energy prices, uncertainty surrounding artificial intelligence-linked technology stocks and mounting government debt have added to investor uncertainty.