Gold falls Rs3,000 per tola in Pakistan as US inflation fears hit bullion
Gold prices in Pakistan fell by Rs3,000 per tola on Wednesday, with the All-Pakistan Gems and Jewellers Sarafa Association quoting the local rate at Rs437,836 per tola. Ten-gram gold declined by Rs2,572 to Rs375,373. The fall reversed a Rs900 per tola gain recorded on Tuesday.
The decline tracked international markets, where spot gold fell 1.7 per cent to $4,086.06 per ounce by 9:03 am EDT (1303 GMT), its lowest since October 7, according to Reuters. US gold futures for December delivery dropped 1.6 per cent to $4,108.60 per ounce. Bullion extended losses for a third consecutive session after US consumer prices accelerated in September, strengthening expectations that the Federal Reserve could raise rates this month. A stronger dollar, with the US dollar index up 0.4 per cent, and rising 10-year Treasury yields added pressure on the non-yielding metal.
Adnan Agar, Director of Interactive Commodities, said international gold touched a low of $4,080 per ounce during the day after reaching a high of $4,190, and was trading around $4,090 at the time of his assessment. He attributed the downward pressure to rising US inflation, which increased expectations of tighter monetary policy, while elevated oil prices could add to inflationary pressures. Agar said some international analysts were anticipating gold could decline towards $3,700–$3,800 per ounce in the coming days, and that a sustained recovery could depend partly on a decline in oil prices. Conversely, oil moving towards $100–$108 per barrel could weigh further on bullion by reinforcing inflation concerns and expectations of higher interest rates.
The outlook, Agar said, will depend on subsequent economic data, central bank signals and movements in the dollar and bond yields. Meanwhile, the Pakistani rupee gained Rs0.01 against the US dollar, closing at 276.95 in the inter-bank market.
