Domestic gold prices decline sharply as renewed Middle East tensions, inflation concerns and interest-rate uncertainty increase bullion market volatility.

KARACHI: Gold prices plunged by Rs11,300 per tola in Pakistan on Wednesday, September 2, 2026, amid escalating tensions in the Middle East and increased volatility in international bullion markets.

According to the All Pakistan Gems and Jewellers Association, the price of 24-karat gold fell to Rs454,036 per tola, compared with the previous session’s closing price of Rs465,336.

The price of 24-karat gold also declined by Rs9,688 per 10 grams, falling to Rs389,262 from Rs398,950 a day earlier.

Bullion market experts attributed the sharp decline in domestic gold prices to renewed tensions in the Middle East following fresh exchanges of strikes involving the United States and Iran.

They said the latest escalation had increased volatility across commodity markets, including precious metals. Gold prices were also affected by concerns over the outlook for interest rates following an uptick in inflation.

Gold prices fall in international market

In the international market, gold prices also recorded a significant decline.

The price of gold fell by $113 per ounce, closing at $4,315, compared with the previous session’s close of $4,428 per ounce.

Market participants are closely monitoring developments in the Middle East, as further escalation could lead to heightened volatility across global financial and commodity markets.

The sharp movement in gold prices also highlights the sensitivity of the precious metal to changes in geopolitical risks, inflation expectations and the interest-rate outlook.