KARACHI: Gold prices declined in Pakistan on Tuesday, tracking losses in international bullion markets as rising oil prices heightened inflation concerns.
The price of 24-karat gold per tola fell by Rs3,600 to Rs435,436, according to rates issued by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA).
Similarly, the price of 24-karat gold per 10 grams decreased by Rs3,086 to Rs373,316, while 10-gram gold of 22-karat purity declined by Rs2,829 to Rs342,218.
In the international market, gold prices dropped by $36 to $4,129 per ounce, the association reported.
Meanwhile, silver prices remained unchanged in the domestic market, with the price per tola standing at Rs6,234 and 10 grams at Rs5,344. International silver prices also remained stable at $57.56 per ounce.
Rising energy costs have added to concerns about persistent inflation, potentially limiting the Federal Reserve’s ability to ease monetary policy.
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“Persistent inflationary pressures, driven by high energy prices, continue to support expectations of further monetary tightening by the Federal Reserve,” said Ricardo Evangelista, director and CEO of ActivTrades.
Oil prices advanced on Tuesday, with Brent crude hovering near a five-month high as traders factored in geopolitical risks stemming from Houthi attacks on Saudi infrastructure and reports of vessel attacks in the Gulf.
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 gold more affordable for buyers using other currencies, potentially supporting demand.
However, traditional safe-haven assets have delivered mixed performance amid this year’s market volatility. Concerns over the Iran war, elevated energy prices, uncertainty surrounding technology stocks linked to artificial intelligence, and mounting government debt have contributed to market uncertainty.
Despite gold’s traditional appeal during periods of instability, prices came under pressure following the outbreak of the Iran war as investors sold previously strong-performing assets to cover losses elsewhere. Government bonds, traditionally viewed as among the safest investments, have also experienced heightened volatility.