KARACHI: Gold prices fell in Pakistan on Tuesday as bullion lost ground in the international market amid a stronger US dollar.
According to the All Pakistan Sarafa Gems and Jewellers Association, the price of 24-karat gold declined by Rs1,300 per tola to Rs422,136.
The rate of 24-karat gold per 10 grams also dropped by Rs1,115 to Rs361,913.
In the international market, gold prices decreased by $13 to $3,996 per ounce, the association said.
Silver prices followed the downward trend in the local market. The price of silver fell by Rs85 per tola to Rs5,793, while the rate for 10 grams declined by Rs73 to Rs4,966.
International silver prices also slipped to $53.15 per ounce.
Strong dollar and inflation concerns pressure bullion
Internationally, the US dollar index rose 0.3 per cent against a basket of major currencies, reaching its highest level in nearly two weeks. A stronger dollar generally puts pressure on gold by making the precious metal more expensive for buyers using other currencies.
Despite its reputation as a safe-haven investment, gold has faced pressure amid uncertainty linked to the Iran war, elevated energy costs, volatility in artificial intelligence-related technology stocks and concerns over rising government debt.
Ricardo Evangelista, director and chief executive of ActivTrades, said gold remained under pressure from the stronger dollar and elevated US Treasury yields. He added that persistent inflation concerns, fuelled by high oil prices, were strengthening expectations that the Federal Reserve would maintain a restrictive monetary policy.
Oil prices rose on Tuesday, with Brent crude trading near $116 per barrel as renewed Houthi attacks on Saudi Arabia underscored continuing risks to energy supplies in the Middle East.
Market participants are also awaiting US Personal Consumption Expenditures (PCE) inflation data scheduled for release on Thursday. The report is closely monitored by the Federal Reserve as it seeks to bring inflation down to its 2 per cent target.
Evangelista said a hawkish signal from the Federal Reserve or higher-than-expected PCE inflation could push gold below the $4,000-per-ounce mark, potentially bringing prices towards $3,900.
