Gold prices declined sharply in the local market on Monday, with the price of gold per tola falling by Rs12,800 following a major decrease in the international market.

In the international bullion market, gold prices decreased by $128 per ounce, settling at $4,156 per ounce.

According to rates released by the All Pakistan Sarafa Gems and Jewellers Association, the price of gold per tola fell to Rs438,136, while the price of 10 grams of gold dropped by Rs10,973 to Rs375,631.

Silver prices also declined in the domestic market, with the price of silver per tola falling by Rs325 to Rs6,578. The price of 10 grams of silver decreased by Rs279 to Rs5,639.

Gold fell 3% to touch its lowest ‌in more than seven weeks, as higher oil prices stoked inflation fears, bolstering the case for elevated interest rates.

Spot gold was down 3% at $4,156.45 per ounce, as of 0814 GMT, hitting ​its lowest since August 5. US gold futures for December delivery fell ​3.1% to $4,188.80.

The dollar held firm, making greenback-priced bullion more expensive for ⁠holders of other currencies, while US Treasury yields extended gains.

“Higher oil prices and ​the increased probability of further US rate hikes being priced in by market participants ​are the main drivers behind gold’s recent weakness,” said UBS analyst Giovanni Staunovo.

“This backdrop could keep US real yields and the US dollar elevated, raising the opportunity cost of holding non-yielding ​gold and contributing to further near-term volatility in the precious metal.”

Brent crude oil ​rebounded after US President Donald Trump rejected a peace deal from Iran to resolve their conflict and ‌reopen ⁠the Strait of Hormuz, keeping tensions in the Middle East elevated. Rising energy costs tend to drive inflation higher by lifting prices across the economy.

Traders see a 70.3% chance of a Fed rate hike in October, CME’s FedWatch Tool showed. The ​US central bank earlier ​this month lifted ⁠rates by a quarter percentage point and indicated that additional increases are likely.

On Friday, Cleveland Fed chief Beth Hammack said she ​is concerned that persistently high inflation risks could condition the ​American public ⁠to accept elevated prices as the norm, adding the central bank cannot let that happen.

Focus is now on a series of US economic releases scheduled for this week, ⁠including job ​openings, the ADP employment report, Personal Consumption Expenditures (PCE) ​readings and nonfarm payrolls.

Among other metals, spot silver fell 4.8% to $61.17 per ounce, platinum declined 2.4% to $1,735.88 ​and palladium lost 2.2% to $1,239.60.