KARACHI: Gold prices on Wednesday decreased by Rs200 per tola in local market after it witnessed fall in the global markets.
The price of 24 karat per tola gold witnessed a decrease of Rs 200 and was sold at Rs 126,000 in the local market against its sale at Rs 126,200 the previous day.
The price of 10 gram 24 karat gold also depreciated by Rs 171 to Rs 108,025 from Rs 108,196 whereas that of and 10 gram 22 karat went down to Rs 99,023 from Rs 99,180.
The price of per tola and ten gram silver remained constant at Rs 1460 and Rs 1251.71 respectively.
The price of gold in international markets eased from one-month peak as dollar and equities climbed on Wednesday.
Gold prices retreated from a more than one-month peak hit in the last session, as a stronger U.S. dollar and increased appetite for riskier assets depressed sentiment.
Spot gold was down 0.8% to $1,791.41 per ounce at 1327 GMT, while U.S. gold futures dropped 1.1% to $1,791.20.
"The main market driver is the decline that was seen on the euro-dollar," said Carlo Alberto De Casa, market analyst at Kinesis. "The dollar is strengthening and this is not the best thing for gold."
The dollar index held near a one-week high that lifted gold's cost for buyers holding other currencies, while European shares rose for a third session, hovering near an all-time high hit last month.
Investors are waiting to see if the U.S. Federal Reserve will hike interest rates three times in the coming year, De Casa said, adding that central bank policies would also be a market driver in 2022.
Higher rates increase bond yields, making non-yielding bullion less attractive.
Gold prices are on track for their biggest yearly decline since 2015, having fallen nearly 5% so far.
"Gold's annual decline this year was largely due to the surging U.S. dollar, propelled by bets that inflation would force the Fed to lean hawkish," said Han Tan, chief market analyst at Exinity.
Bond markets remain circumspect and have yet to be convinced that the Fed can deliver its hawkish pivot without derailing the U.S. economic recovery, Tan said, adding that if Treasury yields rose as expected in 2022, that should erode the appeal of bullion.
Spot silver fell 1.5% to $22.65, platinum dropped 1.4% to $962.45 and palladium shed 1.1% to $1,966.74.
