Shafaqna Pakistan: Gold prices in Pakistan fell sharply on Monday, mirroring a steep decline in international markets as rising US Treasury yields reduced demand for the non-yielding precious metal.
According to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), gold fell by Rs12,800 per tola to Rs438,136. The price of 10-gram gold dropped Rs10,973 to Rs375,631.
Gold had closed at Rs450,936 per tola on Saturday after losing Rs2,100 during the session. The latest decline followed a sharp drop in global gold prices, driven by higher US Treasury yields and renewed uncertainty over the outlook for US interest rates.
Spot gold fell as much as 4% on Monday to $4,111 an ounce, its lowest level since August 5, before recovering part of the decline, Reuters reported. Meanwhile, the benchmark 10-year US Treasury yield climbed to its highest level since June 2007.
Higher bond yields can weigh on gold because the precious metal does not offer regular income, making it relatively less attractive when yields on assets rise. Adnan Agar, Director at Interactive Commodities, said gold had fallen to a low of $4,111, while the market was trading around $4,130 after opening near $4,250. The day’s high was around $4,285. He attributed the immediate pressure on gold to rising yields on 10-year US Treasury bonds.
Agar said the latest decline could represent another downward leg in the market, but suggested that gold could find some support around $4,000 to $4,050 in the coming days and potentially stage a rebound from those levels.
He also said developments surrounding US-Iran tensions could have a significant impact on gold prices. According to Agar, even a short-term ceasefire between Iran and the United States could prove positive for gold by supporting demand for the precious metal.
Meanwhile, silver prices also declined in the domestic market. The price of silver fell Rs325 per tola to Rs6,578. The sharp movement in international gold prices is expected to remain an important factor for the domestic market, along with movements in the rupee-dollar exchange rate and global geopolitical developments. Local gold prices generally track international bullion rates, with changes also affected by currency movements and domestic market conditions. Meanwhile, the Pakistani rupee extended its marginal gains against the US dollar in the inter-bank market on Monday, closing at 277.15, up Rs0.01. The rupee had closed at 277.16 on Friday, gaining Rs0.09 during the previous week.
Source: Express Tribune
