Strong Dollar Sinks Pakistani Gold Prices Amid Fed Rate Hike Bets

Gold prices in Pakistan plummeted on Monday due to the strengthening of the US dollar, which has become more attractive following expectations of further monetary tightening by the Federal Reserve.

The price of gold per tola dropped Rs2,700 to Rs457,536, while 10-gram gold declined Rs2,315 to Rs392,263, according to the All-Pakistan Gems and Jewellers Sarafa Association.

In the international market, spot gold fell by 0.6% to $4,350.39 per ounce, while US gold futures dropped 0.8% to $4,388.40, as traders now see an 88% chance of a December rate hike, according to the FedWatch Tool.

Market expectations for higher interest rates have put pressure on gold, making it more expensive for holders of other currencies. Meanwhile, comments from US Federal Reserve officials, including Minneapolis Fed President Neel Kashkari's statement that inflation remains too high across sectors of the US economy, have further supported the strengthening dollar.