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Gold retreats from historic high after massive rupee appreciation

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2 years ago

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  • Gold rate (24 carats) falls by Rs2,500 per tola.
  • Yellow metal is Rs8,000 per tola “undercost” in Pakistan.
  • Commodity breaks three-session winning streak.

Gold price in Pakistan registered losses on Thursday as the precious commodity retreated from a historic high after investors shifted focus towards riskier assets following positive economic cues in the market, breaking a three-session winning streak.

The depreciation was in line with the rupee movement — which gained ground and closed at 284.42 against the US dollar in the interbank market — and a downtrend in the global markets.

The gold rate (24 carats) fell by Rs2,500 per tola and Rs2,142 per 10 grams to settle at Rs214,500 and Rs183,900, respectively, according to the data released by All-Pakistan Sarafa Gems and Jewellers Association.

The price of the yellow metal was increasing since the last three trading sessions as gold is often hailed as a hedge against inflation.

Pakistan’s monthly inflation in March soared to an all-time high level — 35.4% — from a year earlier, with people feeling more pain from some of the fastest rising consumer prices amid straining budgets as the cost of living continues to outstrip average incomes.

Investors’ attention has now shifted to other markets as the rupee and stocks registered gains following Saudi Arabia’s assurance to the International Monetary Fund (IMF) of depositing $2 billion in Pakistan.

The assurance from Riyadh will play a major role in reviving the stalled bailout programme that Pakistan has been seeking to resume since last year.

Gold price moves in line with the rupee-dollar parity as the country 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.

The association also mentioned that the price of gold is Rs8,000 per tola “undercost” in Pakistan, compared to the Dubai market, showing that the Pakistani gold market was currently cheaper than the global.

Meanwhile, silver prices in the domestic market remained unchanged at Rs2,450 per tola and Rs2,100.48 per 10 grams.

In the international market, gold price declined by $4 per ounce to settle at $2,019.

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Business

Trade ties between Pak-Oman: Both nations decide to activate “Joint Business Council”.

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Jam Kamal Khan, federal minister for commerce, visited Oman Chamber of Commerce and Industry in Muscat alongside chairman Faisal Abdullah Al Rawas.

To enable closer economic collaboration, both sides decided during the meeting to activate joint Business Council between OCCI and the federation of Pakistan Chambers of Commerce and industry.

Concurrent with the conference, the Embassy of Pakistan arranged a b2b networking event in association with OCCI to gather Omani Businessmen and Pakistani Business Delegates investigating trade prospects.

Speaking on the occasion, Jam Kamal Khan said, “Our present trade figures do not fairly represent the depth of our connection. We can quickly raise the current Trade volume to two or three times its present level by just eliminating logistical and communication barriers.

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Business

Despite economic gains, PSX remains strong.

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20 hours ago

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Amidst the ongoing negotiations with the International Monetary Fund (IMF) regarding a loan tranche, the Pakistan Stock Exchange (PSX) has resumed its upward trajectory in recent days.

The KSE-100 Index gained 600 points on Friday, the penultimate working day of the business week, and then increased to 115,730 points as traders showed confidence and engaged in trading.

After experiencing fluctuations, the PSX gained strength on Thursday, as the major index surpassed 115,000 points.

The KSE 100-Index closed at 115,094.23 points after gaining 1,009.70 points, or 0.89 percent. 115,247.39 was the intraday high, and 14,429.93 was the lowest.

According to experts, one important factor is Moody’s Ratings’ upgrade of Pakistani banks. Investor confidence has also increased due to the expectation of a positive conclusion from the negotiations with the International Monetary Fund (IMF).

In its assessment, Moody’s stated, “We have shifted our outlook on Pakistan’s banking system from stable to positive to reflect the banks’ resilient financial performance as well as improving macroeconomic conditions from very weak levels a year ago.”

The major index of the Pakistan Stock Exchange (PSX) surpassed 115,000 on Thursday, indicating a surge in the market.

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Pakistan resolves to meet benchmarks, and the IMF promises economic help.

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In the midst of an ongoing economic review, the delegation from the International Monetary Fund (IMF) has promised Pakistan economic cooperation.

In order to assess the delivery of a $1 billion tranche under the $7 billion rescue deal, IMF officials are now in Pakistan.

Today, March 14, marks the completion of the two-week-long economic review and negotiations between the global lender’s representatives and Pakistani authorities.

The team met with Finance Minister Muhammad Aurangzeb at the Ministry of Finance for the last round of negotiations.

The nation’s economic team’s actions and performance were praised by the visiting officials.

Aurangzeb promised the IMF during the conference that all economic goals would be met. He said that as long as the loan program is in place, no goals would be broken.

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