Gold prices in Pakistan declined by Rs2,500 per tola on Tuesday, settling at Rs434,936, according to the All-Pakistan Gems and Jewellers Sarafa Association. The 10-gram gold also fell by Rs2,143 to Rs372,887. This drop mirrored losses in the international market, where spot gold slipped 0.6% to $4,138.39 per ounce, and US gold futures for August delivery eased 0.5% to $4,148.50.
Market Drivers and Geopolitical Tensions
The decline followed Monday's loss of Rs2,400 per tola, which brought gold to Rs437,436. Domestic bullion rates remain sensitive to international cues, rupee-dollar fluctuations, and import costs. On the global front, market sentiment was shaped by geopolitical risks, particularly after reports of vessel attacks near the Strait of Hormuz, which lifted oil prices and reinforced safe-haven demand dynamics. However, gold faced profit-taking pressure.
Expert Analysis on Gold's Direction
Adnan Agar, Director of Interactive Commodities, provided insights into the international market movement. "Gold hit a high of $4,184, and the low was $4,117. Later, the market was standing at $4,145," he said. "It is trading within a $70 to $80 range. Actually, the market is currently a bit directionless. We need a good close for gold, like if it closes above $4,300, then there will be an upside. If not, the chances for a downward trend are increasing again."
Central Bank Buying and Silver Performance
China's central bank extended its gold buying streak for the 20th consecutive month, underscoring continued official-sector support amid global uncertainties. However, this did not prevent near-term price softness as traders focused on the Fed's policy outlook and persistent Middle East risks. Meanwhile, silver prices also weakened. In Pakistan, per-tola silver dropped by Rs120 to Rs6,559. Internationally, spot silver fell over 1%.
Rupee Stability and Broader Impact
The Pakistani rupee held steady against the US dollar in the inter-bank market, closing at Rs278.10, up one paisa compared to Rs278.11 on Monday, according to the State Bank of Pakistan. The recent volatility in precious metals comes as investors weigh the balance between geopolitical tensions, which typically support gold, and expectations around US rate decisions. A stronger dollar or signals of prolonged higher rates could weigh on non-yielding assets like gold.
