Local gold rates record decline as global prices drop amid easing US-EU tensions

Gold prices in Pakistan fell sharply on Monday, echoing a slowdown in the international bullion market. In the local market, rates dropped by Rs2,600 per tola, settling at Rs351,500, while the price of 10 grams also declined by Rs2,228, closing at Rs301,354.

This drop comes just after gold had reportedly jumped by Rs3,100 per tola on Saturday, hitting a peak of Rs354,100. Gold prices in the international market also took a hit, with prices slipping by $26 per troy ounce to $3,331, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

A Director of a reputable commodities institute outlined how market activity was almost non-existent due to a US bank holiday. According to the director, the market was largely subdued, experiencing a high of $3,356 while touching a low of $3,323. Rates hovered around $3,335, witnessing nominal fluctuations.

As per reports, one of the key reasons for the dip was easing trade tensions between the United States (US) and the European Union (EU). After warning of a 50 percent tariff starting June 1, Donald Trump reportedly agreed over the weekend to delay the decision after talks with the EU. A new deadline has now been set for July 9 to finalise the deal, which pulled some pressure off global markets and dampened demand for gold.

Historically, gold has been perceived by many as a safe-haven asset as it is a great source of value, especially in times of uncertainty. However, with trade tensions decreasing, many are pulling out the funds that they had previously parked into gold as US-EU trade tensions decrease.

For Pakistan, the drop in gold prices could be a good sign as it will allow domestic buyers to purchase the commodity. This is because gold will become more affordable for local buyers allowing people to purchase the yellow metal for the upcoming wedding season.

In other developments, the Pakistani rupee saw a small decline against the US dollar. Data from the State Bank of Pakistan indicates that it closed at 282.06 in the interbank market, slipping by Rs0.09 or 0.03 percent. On a calendar year-to-date basis, the rupee has weakened by 1.24 percent, and by 1.32 percent for the fiscal year so far.

Reports have revealed the performance of other major currencies too, highlighting how the euro and the US dollar gained ground globally against traditional safe-haven currencies like the yen and Swiss franc. This move came after Trump’s tariff retreat, which calmed investor nerves and shifted money away from gold and into riskier assets.