Gold drops as Fed lifts rate-hike bets

Local gold rates slid on Monday, mirroring a sharp reversal in global bullion. The Express Tribune, citing the All-Pakistan Gems and Jewellers Sarafa Association, put 24-carat gold at Rs466,136 per tola after a daily loss of Rs1,800. Ten-gram gold was priced at Rs399,636, down Rs1,543 on the day.

The Monday slide came after a far steeper retreat on Saturday, when the tola price dropped Rs15,100 to Rs467,936. Bullion had already shed over 3% on Friday as traders increased wagers on a possible US rate increase. Spot gold slid to $4,567.23 an ounce by 1744 GMT, a 2.9% fall and its lowest since August 20, Reuters reported, while December US futures closed 2.9% lower at $4,529.90.

Traders focused on comments from Federal Reserve Chairman Kevin Warsh, who argued that inflation still needed "more work to do" before it could be brought down. Those comments raised expectations of tighter policy and pushed the dollar to a one-week high, which typically weighs on gold since it pays no yield. Silver bucked the trend, adding Rs67 to reach Rs7,179 per tola, while the rupee finished Monday at 277.47 per dollar, a Rs0.03 gain on Friday's 277.50 close.