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Gold rate declines in Pakistan as rupee gains ground

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  • Gold price settles at Rs193,200 per tola.
  • Silver price remains unchanged at Rs2,100 per tola.
  •  In international bullion market, gold price decline by $15 per ounce.

Gold retreated in Pakistan on Friday in line with a decline in the international market and the continuous recovery of the rupee against the US dollar.

Data released by the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of gold (24 carats) decreased by Rs2,800 per tola and Rs2,400 per 10 grams to settle at Rs193,200 and Rs165,638, respectively.

A day earlier, the precious commodity saw a dead cat bounce or a temporary recovery after a significant decline in some bargain hunting; however, the price retreated during today’s session.

Meanwhile, silver prices in the domestic market remained unchanged at Rs2,100 per tola and Rs1,800.41 per 10 grams, respectively.

In the international market, gold hurtled towards a third straight weekly drop on Friday, dampened by the dollar’s advance following fresh hawkish rhetoric from the US Federal Reserve officials. The price settled at $1,824 per ounce after a decline of $15.

Two Fed officials said on Thursday the US central bank likely should have lifted interest rates more than it did early this month.

Taking cues from the comments, the dollar index surged to a six-week high, making bullion less attractive for overseas buyers, while bond yields also climbed. 

The latest remarks, putting a 50-basis-point rate hike and more than just one other increase back on the table, is benefiting the dollar and weighing on precious metals markets, said Quantitative Commodity Research analyst Peter Fertig.

While there is potential for gold to recover, it appears limited and would depend on how much the central banks increase rates, beyond what the markets have priced in, Fertig added.

Higher interest rates increase the opportunity cost of holding zero-yield bullion.

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In a first for history, PSX crosses the 77,000 milestone.

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At 77,213.31, the benchmark KSE-100 hit an all-time high, up 1,005.15, or 1.32%, from the previous close of 76,208.16.

The government’s readiness to seal an agreement with the International Monetary Fund (IMF) following the budget was cited by analysts as the reason for the upward trend.

Experts anticipate that in an attempt to bolster its position for a fresh bailout agreement with the International Monetary Fund (IMF), the budget for the fiscal year ending in June 2025 would set aggressive fiscal goals.

Budget for Pakistan, 2024–2025
Pakistan’s budget for the fiscal year 2024–25, with a total expenditure of Rs18.877 trillion, was presented on Wednesday by Minister of Finance and Revenue Muhammad Aurangzeb.

The Finance Minister, Muhammad Aurangzeb, outlined the budget highlights. He stated that the GDP growth target for the fiscal year 2024–25 is set at 3.6 percent, while the inflation rate is anticipated to stay at 12 percent.

He stated that while the primary surplus is anticipated to be 1.0 percent of GDP during the review period, the budget deficit to GDP is forecast to be 6.9 percent over the period under review.

According to the minister, tax income collection increased by 38% in the current fiscal year, and the province will receive Rs7,438 billion. The Federal Board of income expects to earn Rs12,970 billion in revenue for the upcoming fiscal year.

In contrast to the federal government’s projected net income of Rs9,119 billion, he stated that the federation’s non-tax revenue projections are set at Rs3,587 billion.

The federal government’s total outlays are projected to be Rs18,877 billion, with interest payments accounting for the remaining Rs9,775 billion.

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Pakistan currently has $14.38 billion in foreign exchange reserves.

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Pakistan’s commercial banks’ reserves, which stood at $5.28 billion at the conclusion of the week ending on June 7, rose by US$174 million, according to a central bank statement.

Reserving US$6.2 million less, the SBP now has US$9.10 billion in reserves. The causes for the decline in the reserves it had were not disclosed by the central bank.

The SBP released a statement that stated, “SBP reserves decreased by US$ 6 million to US$ 9,103.3 million during the week ended on 07-June-2024.”

The State Bank of Pakistan’s (SBP) foreign exchange reserves were reduced by US$ 63 million as a result of repaying external debt, with the reserves standing at US$ 9.093 billion as of earlier on June 6.

The central bank spokesperson said in a statement that as of the week that concluded on May 31, the nation’s total liquid foreign reserves were $14.31 billion.

In terms of net foreign reserves, commercial banks have US$ 5.22 billion of the overall foreign reserves, according to the SBP.

SBP reserves dropped by US$ 63 million to US$ 9,093.7 million during the week that ended on May 24, 2024, according to the announcement.

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In the local market, the price of gold plummets to Rs240,700/tola.

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Gold with a 24-karat purity level has dropped by Rs1200/tola on the local market.

Each tola of 24-karat gold is now selling for Rs240,700, with a further drop of Rs1029 bringing the price of 10 kilos of gold to Rs206,361. These figures are courtesy of the All Sarafa and Jewelers Association.

Meanwhile, after a $2 decline on the global market, one ounce of gold will be valued $2315.

A tola of gold was worth Rs 600 more on Wednesday.

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