Gold and silver prices witnessed a significant decline on Wednesday in both global and local markets after a one-day pause, as fresh fighting in the Middle East dimmed hopes of a resolution to the US–Israeli war with Iran, heightening concerns about inflation and potential interest rate hikes.

In the international bullion market, spot gold was down 2.1% at $4,172.44 per ounce, its lowest level since March 23. US gold futures ​for August delivery shed 2.1% to $4,195.60.

Following international trends, gold and silver prices in Pakistan also recorded a significant decline. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola dropped by Rs12,627 to settle at Rs442,436.

Similarly, the price of 10 grams of gold decreased by Rs11,364 to Rs378,170.

Silver prices also declined, with the per tola rate falling by Rs385 to Rs6,929. The price of 10 grams of silver also dropped by Rs352 to Rs5,893.

Iran’s Revolutionary Guards said they had carried out missile and drone attacks on US military bases in Jordan, Kuwait and Bahrain in retaliation for American strikes on Iranian targets around the Strait of Hormuz.

The clashes mark one of the biggest exchanges of hostilities since the two countries agreed to a ceasefire in April.

Bullion has fallen more than 20% since the US-backed war with Iran began in late February. The conflict has led to a surge in oil prices, stoking fears of inflation and higher interest rates.

While gold is traditionally seen as a hedge against inflation, higher interest rates typically weigh on the non-yielding metal.

Investors are now awaiting May Consumer Price Index data later in the day and the Producer Price Index reading on Thursday to gauge the Federal Reserve’s monetary policy stance, after a strong jobs report last week raised bets on further rate hikes.

Spot silver fell 2.1% to $63.99 per ounce, platinum dropped 3.1% to $1,673.97, and palladium fell 0.4% to $1,217.

On Tuesday, gold and silver prices rose in both global and local markets after a three-day pause. In the international bullion market, the price of gold per ounce increased by $28.29 to reach $4,326.27.

Read: Gold prices rise after three-day pause in global, local markets

According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola rose by Rs2,830 to reach Rs455,063. The price of 10 grams of gold increased by Rs2,306 to Rs389,534.

The price of silver per tola increased by Rs141 to reach Rs7,314, while the price of 10 grams of silver rose by Rs129 to Rs6,245.

On Monday, gold prices in Pakistan declined in line with a subdued international market trend. In the local bullion market, the price of gold per tola fell to Rs452,233 after a decline of Rs3,094, according to data released by the All-Pakistan Gems and Jewellers Sarafa Association.

Similarly, the 10-gram gold was sold for Rs386,987, down Rs2,785.

On Saturday, international gold prices dropped by $124 per ounce, while in the local market, the price of gold declined by Rs12,489 per tola and Rs11,240 per 10 grams.

On Friday, The price of gold in the international bullion market decreased by $14 per ounce to $4,453. In the local market, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold fell by Rs1,469 per tola to Rs467,816, while the price of 10 grams of gold decreased by Rs1,323 to Rs401,012.

Read more: Gold prices fall in local market as international rates decline

Similarly, the international price of silver fell by 66 cents per ounce to $72.52.

Following the decline in global prices, the price of silver in local markets also decreased. The price of silver fell by Rs67 per tola to Rs7,730, while the price of 10 grams of silver declined by Rs61 to Rs6,623