Gold drops to seven-month low, posts worst quarter in a decade

Gold prices in Pakistan fell sharply over two consecutive sessions on June 29 and 30, shedding a combined Rs6,400 per tola to settle at Rs424,836, as the domestic market tracked steep losses in the international bullion market where spot gold slipped to its weakest level since November 2025.

A Two-Day Slide

On Monday, June 29, the price of 24-karat gold per tola fell by Rs2,300 to Rs428,936, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). The decline deepened on Tuesday, with gold losing another Rs4,100 per tola to close at Rs424,836, as reported by The Express Tribune and confirmed by domestic trade data.brecorder+3

In the international market, spot gold slipped to $3,942.99 per ounce on Tuesday — its lowest since November 2025 — before trading around $3,979 on Wednesday morning. Gold has lost 12.4 percent so far in June, putting it on course for its biggest monthly decline since October 2008 and its fourth consecutive monthly loss.thehindubusinessline+1

Yields, the Fed, and Fading Safe-Haven Demand

The sell-off was driven by a confluence of factors. Rising US Treasury yields and a firmer dollar made non-yielding gold less attractive, while growing expectations that the Federal Reserve will raise interest rates later this year added to selling pressure. Traders are pricing in roughly a 67 percent chance of a rate hike by September, according to the CME FedWatch Tool.cnbc+1

"It looks like the pressure from higher yields is what's getting gold lower. The US dollar is also a touch higher at the same time, which kind of confirms what's going on," said Ilya Spivak, head of global macro at Tastylive.thehindubusinessline

Federal Reserve Bank of Cleveland President Beth Hammack said on Tuesday that she may advocate for higher interest rates if inflation pressures fail to ease, underscoring a still-hawkish policy outlook.thehindubusinessline

Broader Context

Gold has shed roughly 28 percent from its all-time high of $5,598.75 per ounce reached in January 2026. Analysts at CNBC parent NBCUniversal's business network attributed the reversal to what they called a broad retreat from the "debasement trade" by both retail and institutional investors. ING analysts have revised their gold forecasts lower, now expecting prices to average $4,300 per ounce in the third quarter.cryptonomist+2

The conflict in the Middle East, which initially supported safe-haven demand, has paradoxically weighed on gold by fueling inflation expectations and reinforcing the case for tighter monetary policy.indexbox+1