Global retreat drags down gold prices in Pakistan for third straight day

Tracking a global retreat, gold prices in Pakistan fell for the third straight day on Thursday, with the per tola (11.7 grammes) rate dropping by Rs3,300 to settle at Rs303,000, according to the All Pakistan Gems and Jewellers Sarafa Association (APGJSA).

Similarly, the price of 10 grammes of the precious metal declined by Rs2,829, reaching Rs259,773.

Silver prices, on the other hand, remained unchanged at Rs3,314 per tola and Rs2,841 per 10 grammes. 

Yellow metal in the local markets slipped Rs2,400 per tola to Rs306,300 on Wednesday, while prices of silver dipped Rs36 to Rs3,314 per tola.

International gold prices fell over 1% to their lowest level in more than a week on Thursday, as the US dollar firmed, while investors awaited a key inflation print that could offer clues on the Federal Reserve's monetary policy. 

Spot gold was down 1% at $2,889.13 an ounce by 1127 GMT, its lowest since February 17. Prices hit a record peak of $2,956.15 on Monday, driven by safe-haven flows. US gold futures lost nearly 1% to $2,901.50.

The dollar index rose 0.2% to move further from the recent 11-week lows, making greenback-priced bullion more expensive for other currency holders.

US President Donald Trump raised hopes for another month-long pause on steep new tariffs on imports from Mexico and Canada, saying they could take effect on April 2, and floated a 25% "reciprocal" tariff on European cars and other goods.

This uncertainty "sent investors rushing towards the dollar's embrace, enforcing fresh pressure on gold, which was already experiencing profit-taking from record highs," said Lukman Otunuga, senior research analyst at FXTM.

No let-up in demand 

The demand of gold including over-the-counter (OTC) trading rose by 1% to a record high of 4,974.5 metric tons in 2024 as investment increased, the World Gold Council (WGC) said earlier this month, adding that central banks sped up buying in the fourth quarter.

Central banks, a major source of gold demand, bought more than 1,000 tons of the metal for the third year in a row in 2024.

In the final quarter of 2024, when Trump won the US election, buying by central banks accelerated by 54% year on year to 333 tons, the WGC calculated, based on reported purchases and an estimate of unreported buying.

Total gold demand, excluding opaque OTC trading, rose 1% to 4,553.7 tons last year, the highest since 2022, the WGC said. It estimates that OTC demand fell 7% due to a slump in the final quarter of the year as profit-taking offset persistent demand from high-net-worth investors.

Gold jewellery consumption, the biggest category of physical demand, fell 11% in 2024, while mine production was steady and recycling rose 15%.

The WGC expects jewellery demand to remain under pressure and recycling to rise further this year due to high prices.