Gold prices fell on Friday as holders of long positions sold their holdings following 12 straight sessions of gains, but the outlook remained positive as long as prices remained close to record highs.

According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold dropped by Rs3,350 per tola and Rs2,872 per 10 kilos, settling at Rs177,300 and Rs152,006 respectively (APSGJA).

The traders had already planned for a market downturn once the price of the valuable commodity reached fresh highs. On December 22, the price of gold reached an all-time high of Rs180,650 per tola.

Since December 1, gold prices have increased by a total of Rs16,100, or 9.98% a tola, raising questions about whether the recent price increases are sustainable or represent an unsustainable bubble.

Chand has attributed the astronomical rise in gold prices to speculators. Contrary to assertions, he claimed, there is very little local market demand.

It should be emphasised that the APSGJA notifies the market of the price of gold each day after determining it based on its rates on international markets, the rupee-dollar exchange rate, and demand and supply in domestic markets.

Analysts theorise that the recent price increase was caused by the lack of the dollar in Pakistan and the expanding gap between interbank and open market exchange rates; nevertheless, grey markets for the valuable commodity have also fueled the assumptions.

At an all-time high of Rs2,100 per tola and Rs1,800.41 for 10 grammes, respectively, silver prices were unaltered in the meantime.

Ahead of a long holiday weekend, gold prices managed gains on the global market as investors awaited US inflation data that was coming later in the day and would provide some guidance on the Federal Reserve's rate-hike trajectory. Prices dropped by $18 per ounce before stabilising at $1,797.