KARACHI:

Gold prices in Pakistan fell sharply on Friday despite a notable rebound in the international bullion market amid ongoing volatility in precious metals.

In the domestic market, the price of gold per tola declined by Rs8,600 to settle at Rs519,962. Similarly, the price of 10-gram gold dropped by Rs7,373 to Rs445,783, according to data released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). A day earlier, gold prices had remained unchanged at Rs528,562 per tola. Silver prices also edged lower, shedding Rs501 to close at Rs8,324 per tola in the local market.

In contrast, international gold prices rose more than 1% on Friday after weaker-than-expected US inflation data renewed optimism that the federal reserve could begin cutting interest rates later this year. Lower interest rate expectations typically support non-yielding assets such as gold by reducing the opportunity cost of holding bullion.

Spot gold was trading at $4,992.27 per ounce by 1412 GMT, up 1.5% on the day and around 0.6% higher for the week. The rebound came after bullion prices had fallen nearly 3% on Thursday, when prices touched their lowest level in almost a week amid stronger-than-expected US labour market data that initially dampened expectations of aggressive monetary easing.

Analysts noted that the softer US consumer price data for January helped stabilise investor sentiment and triggered fresh buying interest in global markets. However, persistent macroeconomic uncertainty and shifting expectations around US monetary policy continue to fuel short-term volatility.

Director of Interactive Commodities Adnan Agar said gold traded between $4,913 and $5,020 during Friday’s session and was hovering near $4,995 at the time of reporting. He observed that the inflation data offered short-term support but cautioned that prices would remain under pressure unless the metal breaks above the $5,200 resistance level.

Agar added that if gold were to close below the $4,900 mark in the coming days, the market could witness further downside, potentially revisiting the $4,600 range. He said investors would closely monitor upcoming economic indicators and federal reserve signals next week, which are expected to shape near-term price direction.

Market participants expect continued fluctuations in both local and international markets as traders respond to evolving macroeconomic data and currency movements.

Meanwhile, the Pakistani rupee posted a slight gain against the US dollar in the inter-bank market on Friday, strengthening by 0.01%. By the close of trading, the currency settled at 279.62, improving by Rs0.03 from the previous session, compared with 279.65 a day earlier, according to official data.

In global currency markets, the Japanese yen was on track for its strongest weekly performance in nearly 15 months, supported by steady gains following Prime Minister Sanae Takaichi’s landmark election victory, which eased investor concerns over Japan’s fiscal outlook.