KARACHI: Gold prices declined in the local market on Monday, tracking a downward trend in international bullion rates as a firm US dollar weighed on the precious metal and investors awaited key US inflation data that could influence the Federal Reserve’s interest rate outlook.
According to rates issued by the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of 24-karat gold per tola fell by Rs2,100 to settle at Rs439,936.
Similarly, the price of 24-karat gold per 10 grams decreased by Rs1,800 to Rs377,174, while 10 grams of 22-karat gold declined by Rs1,650 to Rs345,755.
In the international market, gold prices fell by $21 to $4,174 per ounce, the association reported.
Silver prices also recorded a decline in the domestic market. The price of silver per tola decreased by Rs23 to Rs6,532, while the price of 10 grams fell by Rs19 to Rs5,600.
In the international market, silver prices dropped by $0.23 to $60.54 per ounce, according to the association.
Globally, investors remained focused on developments in the Middle East and upcoming US economic indicators for clues about the future direction of Federal Reserve interest rates.
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The US dollar held near its strongest level in a year and a half on Monday, supported by investor caution amid escalating tensions in the Middle East and ahead of key inflation data due later in the week.
A stronger dollar generally makes gold more expensive for holders of other currencies, potentially weighing on demand for the precious metal.
Gold is traditionally considered a hedge against inflation and a safe-haven asset during periods of economic and geopolitical uncertainty. However, higher interest rates tend to weigh on gold demand because the metal does not offer interest returns, making yield-bearing assets more attractive.
Investors were also assessing the minutes of the US Federal Reserve’s September meeting for further indications of the central bank’s monetary policy outlook.
“Gold is under pressure from a dollar that remains near recent highs, with investors adopting a cautious stance ahead of this week’s release of US inflation figures,” said Ricardo Evangelista, director and chief executive of ActivTrades.