Gold declines sharply despite global rebound

Gold prices in Pakistan dropped steeply on Friday, with one tola falling by Rs5,600 to Rs456,736 even though overseas bullion climbed. According to The Express Tribune, the All-Pakistan Gems and Jewellers Sarafa Association shows the 10-gram rate lower by Rs4,801 at Rs391,577. Local prices also reflect currency-linked pricing and recent swings in international bullion, adding pressure to the domestic market. Silver in Pakistan fell Rs253 to Rs6,871 per tola, while the rupee firmed Rs0.03 to 277.32 against the dollar in the inter-bank market.

Spot gold gained 1.2% to $4,366.69 an ounce by 11:22 am EDT on Friday, yet it still finished the week about 1.4% lower. Investors were weighing firmer US consumer inflation for August, which strengthened expectations of a Federal Reserve rate increase at its next meeting. Traders priced in an 87% chance of a hike in September, and higher rates typically make the non-yielding metal less attractive.

Interactive Commodities Director Adnan Agar said gold traded between $4,292 and $4,402 and was near $4,360 later, with the $4,300 and $4,400 levels being key. He said the Federal Reserve's decision on Wednesday will be decisive for the next move, and a hike paired with a hawkish message could push bullion lower first. Agar also noted that inflation could support gold over the longer term as a hedge.