Karachi: Gold prices fell sharply in Pakistan on Monday, September 14, tracking a decline in international bullion rates as investors assessed geopolitical uncertainty and changing expectations over US interest rates.
According to rates issued by the All Pakistan Sarafa Gems and Jewellers Association, the price of 24-karat gold dropped by Rs3,800 per tola to Rs453,336.
The price of 10 grams of 24-karat gold declined by Rs3,258 to Rs388,662, while 10 grams of 22-karat gold fell by Rs2,987 to Rs356,286.
In the international market, gold dropped by $38 to $4,308 per ounce, the association said.
Silver prices also declined, with the domestic rate falling by Rs122 per tola to Rs6,802. The price of 10 grams of silver decreased by Rs105 to Rs5,831.
International silver prices fell by $1.22 to $63.23 per ounce.
Investors continued to monitor geopolitical developments in the Middle East while assessing the latest US inflation figures for indications of the Federal Reserve’s next move on interest rates.
Expectations of a US interest-rate increase strengthened following hotter-than-expected inflation data and rising oil prices. The US dollar also climbed to a more than one-week high, making dollar-denominated gold more expensive for buyers using other currencies.
“Markets are now fully pricing in a Fed rate hike following last week’s CPI data. At the same time, the renewed rise in oil prices could reinforce inflation concerns and keep the Fed on a hawkish footing,” UBS analyst Giovanni Staunovo said.
US consumer prices accelerated in August, while a key measure of underlying inflation recorded its largest increase in four months, according to data released on Friday, reinforcing expectations that interest rates could rise.
Although gold is traditionally regarded as a hedge against inflation and a safe-haven asset during periods of economic and geopolitical uncertainty, higher interest rates can reduce its appeal because the precious metal does not generate interest or other yields.