Gold drops Rs9,000/tola as dollar firms

Extends decline, stands at Rs514,762 amid easing geopolitical tensions; rupee stable

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Photo: Express News

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KARACHI:

Gold prices in Pakistan fell sharply on Tuesday, tracking losses in the international market where bullion declined more than 2% amid easing geopolitical tensions and a stronger US dollar that dampened safe-haven demand.

In the local market, the price of gold per tola dropped by Rs9,000 to settle at Rs514,762, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, 10-gram gold was sold at Rs441,325 after a decline of Rs7,716 during the day.

The latest fall comes a day after gold per tola decreased by Rs3,200 to Rs523,762, indicating heightened volatility in domestic bullion markets in line with global trends.

Silver prices also moved lower, shedding Rs150 to reach Rs8,014 per tola in the local market. Internationally, spot gold fell 2.2% to $4,883.85 per ounce by 1633 GMT, while US gold futures for April delivery declined 2.9% to $4,900.80 per ounce, according to Reuters.

Market analysts attributed the global decline primarily to reduced geopolitical risk premiums after signs of progress in US-Iran nuclear negotiations and renewed diplomatic engagement around the Russia-Ukraine conflict. Such developments typically reduce investor appetite for safe-haven assets like gold.

A firmer US dollar further pressured bullion prices by making gold more expensive for holders of other currencies, reinforcing the downward trend.

Adnan Agar, Director at Interactive Commodities, said the market showed clear downside pressure during the session. "Gold traded between the low of $4,839 and the high of $4,991, roughly near its opening level. There is visible pressure, and prices could move towards $4,750," he noted.

Agar added that a decisive break below that support level could accelerate selling momentum. "If gold breaks $4,750, there is a strong possibility the market could test $4,600 in the coming days," he said.

Investors are also awaiting the release of minutes from the US Federal Reserve's January Federal Open Market Committee (FOMC) meeting on Wednesday, which may provide further cues on interest rate direction and the dollar outlook – the key drivers for gold. Bullion markets in Pakistan typically mirror international price movements while also factoring in rupee-dollar parity and local demand conditions.

The Pakistani rupee posted a slight uptick against the US dollar in the inter-bank market on Tuesday. By the close of trading, the currency stood at 279.60 per dollar, improving by Rs0.01 from the previous session. On Monday, the rupee had settled at 279.61, according to data released by the State Bank of Pakistan.

In global markets, the US dollar remained firm as investors looked ahead to signals due later this week on the likely timing of rate cuts by the Federal Reserve.