Gold prices in Pakistan declined sharply on Wednesday, with the per tola rate falling by Rs4,700 to settle at Rs430,236, according to the All-Pakistan Gems and Jewellers Sarafa Association. The 10-gram gold also saw a reduction of Rs4,029, closing at Rs368,858. Silver prices dropped by Rs138 to Rs6,421 per tola.
Global Market Impact
The local downturn mirrored international trends, where spot gold fell 2% to $4,025.67 per ounce by 11:35 am EDT (1535 GMT), hitting its lowest level since July 1 earlier in the session, as reported by Reuters. US gold futures for August delivery slipped 2.9% to $4,035.20 per ounce. The decline was driven by a surge in crude oil prices, which jumped over 5% amid renewed US-Iran tensions following President Donald Trump's statement that an interim agreement to end the conflict was “over.”
Market Analysis and Outlook
Adnan Agar, Director at Interactive Commodities, attributed the drop in gold to the hike in crude oil prices. “While trading around $4,031, the market may head towards $3,900 in the coming days and could go further down towards $3,600,” Agar added. The renewed weakness in gold comes as investors assess the implications of Trump's comments, which fueled uncertainty, boosted oil prices, and raised inflation concerns, weighing on gold's safe-haven appeal.
Market participants were also awaiting the release of the Federal Reserve's June meeting minutes, scheduled for 2 pm EDT, for further clues on the US central bank's monetary policy outlook. In a separate development, the Bank of America (BofA) cut its 2026 gold price forecast, signalling subdued optimism for the metal's medium-term performance. Analysts note that while gold remains a key hedge against geopolitical risks, current dynamics favour risk assets and commodities like oil in the short term.
Currency Movement
The Pakistani rupee posted a marginal 0.01% gain against the US dollar on Wednesday, closing at 278.07 in the inter-bank market, up Rs0.03 from Tuesday's close at 278.10.
