KARACHI: Gold prices recorded an increase of Rs350 on Monday in local markets.

The price of 24 karat per tola gold witnessed an increase of Rs350 and was sold at Rs126,350 in the local market on Monday against its sale at Rs126,000 on Saturday.

The price of 10 gram 24 karat gold also appreciated by Rs 300 to Rs108,325 from Rs108,025.

According to Geo News, gold rates in Pakistan are around Rs1,000 below the cost compared to the gold rate in the Dubai market.

The gold price in Pakistan usually depends on different factors such as the exchange rate between US dollars and Pakistan rupees and fluctuation in international gold market.

Silver prices, however, in the domestic market remained unchanged at Rs1,470 per tola and Rs1,260.28 per 10 gram on Monday.

In global markets gold prices advanced towards last week's two-month high on Monday as U.S. bond yields continued to fall and investors looked to invest in the safe-haven metal over concerns about tensions between Russia and Ukraine, Reuters reported.

Spot gold was 0.5% higher at $1,841.50 per ounce by 1013 GMT, holding close to last week's high of $1,847.42 an ounce. U.S. gold futures GCv1 rose an equal amount to $1,840.70.

Investors are looking towards the U.S. Federal Reserve's two-day policy meeting starting on Tuesday. The Fed is expected tighten monetary policy at a much faster pace than thought a month ago to tame persistently high inflation.

"I don't expect (Fed) to have a significant impact on what gold prices are doing at this moment because the markets are more concerned about what's going on in Eastern Europe," Michael Hewson, chief market analyst at CMC Markets UK told Geo.

"The markets have already priced in a March hike so I don't think there's going to be any surprise."

Rising U.S. interest rates increase the opportunity cost of holding non-interest-bearing bullion. Benchmark U.S. 10-year Treasury yields US10YT=RR fell to an one-week low, helping gold.

Signs of poor risk appetite were displayed across markets as Asian and European shares slipped on worries over tighter monetary policy.

"Assuming that the current wave of risk aversion ebbs away eventually as the Fed addresses these fears, and barring a deterioration of the economic outlook, we thus believe that the gold and silver markets are again experiencing a temporary but no lasting rebound," Julius Baer analyst Carsten Menke told Geo.