Gold Prices Plunge in Pakistan Amidst Global Market Pressures

Gold prices in Pakistan experienced a significant decline on Monday, March 23, 2026, falling by Rs43,600 per tola to Rs447,762. This drop mirrors a broader trend in the international market, where gold hit a four-month low due to escalating Middle East conflict, rising inflation fears, and expectations of potential interest rate hikes.

Steepest Single-Day Decline

The price decrease represents the steepest single-day drop in Pakistan’s gold market history. Spot gold declined 6.3% to $4,203.21 per ounce by 07:57 GMT (12:57pm PKT), extending losses for the ninth consecutive session. Earlier in the day, it reached $4,097.99, its lowest level since November 24.

Global Market Trends

Globally, gold logged its biggest weekly loss in approximately 43 years last week, shedding over 10% – the largest weekly fall since February 1983. As of March 23, 2026, gold has retreated around 25% from its record peak of $5,594.82 an ounce reached on January 29. US gold futures for April delivery also fell sharply, dropping 8.1% to $4,205.10.

Factors Driving the Decline

Several factors are contributing to the downturn in gold prices. The ongoing conflict in the Middle East is fueling inflation concerns, particularly with oil prices remaining above $100 a barrel. This has led to a shift in market expectations, moving away from anticipated interest rate cuts towards the possibility of rate hikes.

According to Tim Waterer, chief market analyst at KCM Trade, “With the Iranian conflict into its fourth week, and oil prices hanging around the $100 level, expectations have pivoted from rate cuts to potential rate hikes, which have tarnished gold’s appeal from a yield point of view.”

The strengthening US dollar and rising US Treasury yields are also putting downward pressure on gold prices. Traditionally viewed as a hedge against inflation, gold’s appeal diminishes when interest rates rise, as investors favor assets that offer a yield.

Impact on Other Precious Metals

The decline wasn’t limited to gold. Other precious metals also experienced significant losses. Spot silver declined 6.1% to $63.66 per ounce, while platinum slipped 6.4% to $1,799.25. Both metals reached their lowest levels since mid-December. Palladium shed 3.6% to $1,352.75.

Market Outlook

BMI, a unit of Fitch Solutions, suggests that a shift towards macro-driven positioning could further depress gold prices. “A reinforced shift from safe-haven allocation towards macro-driven positioning could skew risks further to the downside, as a firmer US dollar and the receding probability of the Fed easing dominate the narrative,” BMI stated.

Market pricing indicates a growing likelihood of a US Federal Reserve rate hike this year, with rate futures suggesting a higher probability of rate increases than cuts by the end of 2026.