Gold falls on US inflation fears

Local gold rates dropped by Rs3,000 per tola on Wednesday, according to the All-Pakistan Gems and Jewellers Sarafa Association, settling at Rs437,836. The 10-gram price fell by Rs2,572 to Rs375,373, reversing the Rs900 per tola gain recorded on Tuesday.

Overseas, spot gold lost 1.7% to $4,086.06 per ounce, its lowest since October 7, while US December futures slipped 1.6% to $4,108.60, as Reuters reported. The slide stretched into a third straight session after faster US consumer price growth in September raised the chance of a Federal Reserve rate increase this month.

Adnan Agar of Interactive Commodities attributed the downward pressure to US inflation, while the dollar index rose 0.4% and 10-year Treasury yields climbed. He also said elevated oil prices could add to inflation pressure, and that some analysts were anticipating gold could fall toward $3,700-$3,800 per ounce. Locally, the rupee gained Rs0.01 to close at 276.95 in the inter-bank market.