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Gold rate sees massive increase in Pakistan

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  • Gold price settles at Rs206,500 per tola in Pakistan.
  • It jumps after rupee’s historic decline against dollar.
  • Gold rate Rs3,000 per tola “undercost” in Pakistan.

Following a historic decline of the Pakistani rupee against the US dollar, the per tola gold price in Pakistan surged by a whopping 4.77% as investors’ attention once again diverted towards the precious commodity considered as an inflation hedge.

According to All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) surged by Rs9,400 per tola and Rs8,058 per 10 grams to settle at Rs206,500 and Rs177,040, respectively.

The massive increase in the price of gold came on after the rupee plunged by nearly Rs19, or 6.66%, against the US dollar to close at 285.09 against the dollar in the interbank market.

The price of gold is Rs3,000 per tola “undercost” in Pakistan, as compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.

It should be noted that Pakistan meets almost all its gold demand through imports, and traders follow its international price in setting rates in the country. Jewellers import the metal against the US dollar and UAE dirham before converting its price into rupees.

Cumulatively, the precious commodity gained Rs12,400 per tola in the last three sessions reversing the prevailing trend recorded last week — when gold lost Rs1,900 per tola.

The precious commodity scaled to an all-time high of 210,500 per tola on January 30, 2023; however, the gold price started receding after the rupee recovered on hopes of revival of the $6.5 billion International Monetary Fund (IMF) bailout programme.

Meanwhile, silver prices in the domestic market jumped by Rs120 per tola and Rs102.88 Rs2,200 per tola and Rs1,886.14 per 10 grams, respectively.

Gold prices broke a winning run on Thursday, weighed down by a firmer dollar and bullion’s outlook remains clouded by prospects of further interest rate hikes from the US Federal Reserve. The per-ounce price settled at $1,837 after an increase of $27.

While gold is considered a hedge against inflation, recent central bank rate hikes to bring down price pressures have weighed on the appetite for the metal since it yields no interest.

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Pakistan’s gold price increases by an additional Rs. 800 per tola.

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The price of yellow metal in the local market hit Rs247,300 on the first working day of the week, following a rise of Rs800 in a single day.

The cost of ten grams of 24-karat gold increased by Rs686 on Monday, making the current price Rs212,020.

In addition, the cost of 10 grams of 22-karat gold increased significantly, trading at Rs194,351.

These fluctuations are strongly correlated with shifts in the US dollar’s value, demonstrating the tight connection between gold prices and exchange rates. This emphasizes how local gold markets are impacted by variables related to the global economy.

The price of the precious metal dropped $16 on the international market on Monday, hitting $2,348 per ounce.

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A delegation from Pakistan travels to the US to bargain with the IMF for a new loan.

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The Pakistani delegation consists of the Governor of the State Bank of Pakistan, the Secretary of Finance, the Additional Secretary, and other individuals.

The Finance Minister was greeted at the airport by Pakistan’s Ambassador to the United States, Masood Khan, and Embassy staff.

The Finance Minister will meet with representatives of the World Bank and IMF while he is in the US.

The IMF and Pakistan are expected to negotiate next week, according to sources.

Sources claim that Islamabad will apply for a new credit package from the IMF.

The Finance Minister’s itinerary also includes meetings with members of think tanks and the world press.

Last month, Pakistan and the IMF came to a staff-level agreement over the third and final review of the $3 billion stand-by arrangement. Should the board of the global lender approve this deal, Pakistan will get approximately $1.1 billion.

Although a specific date has not been determined, the IMF board is anticipated to evaluate the case in late April, according to a spokeswoman.

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Pakistan’s petrol prices are anticipated to rise.

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The Oil and Gas Regulatory Authority (OGRA) will not disclose the anticipated increase in fuel prices until its work is finished, according to sources.

Prime Minister Shehbaz Sharif will receive the summary of the petrol price, and sources further stated that the new pricing will be revealed following his approval today.

Noteworthy to highlight is that Pakistan was previously ordered by the International Monetary Fund (IMF) to impose an 18% General Sales Tax (GST) on gasoline.

Details indicate that Pakistan was requested by the Monetary Fund to stop reducing sales tax on all goods, including gasoline.

To boost tax revenue, Pakistan’s recently elected government should impose a sales tax on petroleum items in addition to a Rs 60 charge.

High-speed diesel (HSD) was reduced by Rs3.32 per litre on March 31 but petrol prices increased by Rs9.66 per litre by the government.

In contrast to the reduction in the price of high-speed diesel (HSD) to Rs282.24 from Rs278.92, the price of gasoline jumped to Rs289.41 per litre.

The adjustments were brought about by a commensurate increase in the price of gasoline and a decline in the price of HSD on the global market, according to a statement released by the Finance Ministry.

According to the statement, the adjustment was made in accordance with government policy, which transfers pricing differences from the foreign market to the home market.

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