ISLAMABAD: The price of 24 karat per tola gold witnessed an increase of Rs100 and was sold at Rs126,250 in the local market on Wednesday against its sale at Rs126,150 the previous day.

The price of 10 gram 24 karat gold also increased by Rs86 to Rs108,239 from Rs108,153 whereas that of and 10 gram 22 karat went up from Rs99,140 to Rs99,219.

The price of per tola and ten gram silver remained constant at Rs1460 and Rs1251.71 respectively.

Meanwhile the price of gold in international market witnessed increase of $17 and was traded at $1820 against its sale at $1803.

Gold was supported by declines in the dollar and worries over the fast-spreading Omicron variant, as focus turned to inflation ahead of the release of the minutes of the U.S. Federal Reserve's latest policy meeting.

Spot gold was last up 0.5% at $1,823.56 per ounce by 12:08 p.m. ET (1708 GMT), with U.S. gold futures rising 0.6% to $1,824.70.

With inflation having surged in the past six months, investors will scan the minutes from the Fed's December meeting, releasing at 1900 GMT, for signs of policymakers' willingness to tighten monetary policy.

"Price inflation that becomes problematic is bullish for hard assets like the raw commodities, including the precious metal. And with some of the inflation worries starting to resurface, that's inviting some buying interest in the safe haven gold market," said Jim Wyckoff, a senior analyst at Kitco Metals.

The dollar eased 0.3%, making bullion an attractive bet for overseas buyers.

Further boosting gold was a subdued risk appetite in equity markets, with Wall Street's main indexes opening lower weighed by technology stocks.

Gold prices are firming despite the market pricing of a 70% probability for a Fed rate hike in March, as appetite for safe-havens grow amid soaring infections, rising rates and wobbly equity prices, TD Securities wrote in a note.

Although gold is considered a hedge against excess inflation, higher interest rates may tarnish its appeal by increase the opportunity cost of holding bullion

Meanwhile, Goldman Sachs said in a note that cryptocurrency bitcoin will take market share away from gold in 2022 as digital assets become more widely adopted.

In other precious metals, spot silver rose 0.3% to $23.10 an ounce, platinum was up 2.4% at $994.51, and palladium gained 1.3% at $1,894.74.