Gold and Silver Prices Fall Sharply in Global and Local Markets
Gold and silver prices recorded a sharp decline on Wednesday in both international and domestic markets, as escalating tensions in the Middle East and concerns over inflation and interest rate hikes weighed on investor sentiment.
In the global bullion market, gold prices fell significantly, with spot gold declining 2.1% to $4,172.44 per ounce, marking its lowest level since March 23. US gold futures for August delivery also dropped 2.1% to $4,195.60, reflecting continued pressure on the precious metal.
Following the global trend, local prices in Pakistan also witnessed a notable decrease. According to the All Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola fell by Rs12,627 to settle at Rs442,436, while the rate for 10 grams declined by Rs11,364 to Rs378,170.
Silver prices also dropped in the domestic market, with per tola rates decreasing by Rs385 to Rs6,929, and 10 grams falling by Rs352 to Rs5,893.
Market analysts linked the decline to heightened geopolitical tensions following fresh clashes involving Iran and US-linked forces in the region. Reports of missile and drone attacks on US military bases in Jordan, Kuwait, and Bahrain have intensified uncertainty, contributing to volatility in global commodity markets.
The ongoing conflict has already driven oil prices higher, raising concerns about inflation and prompting expectations of further interest rate hikes by central banks. While gold is traditionally considered a hedge against inflation, rising interest rates tend to reduce its appeal as a non-yielding asset.
Investors are now closely watching upcoming economic indicators, including US Consumer Price Index (CPI) and Producer Price Index (PPI) data, for signals on future monetary policy decisions.
Other precious metals also saw declines, with spot silver falling 2.1% to $63.99 per ounce, platinum dropping 3.1% to $1,673.97, and palladium slipping 0.4% to $1,217.
The latest drop follows a brief recovery earlier in the week, when gold and silver prices had rebounded after a short pause. However, continued geopolitical uncertainty and shifting global economic conditions have kept bullion markets highly volatile.