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Gold retreats in Pakistan as hopes rekindle on IMF programme’s revival

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2 years ago

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  • Gold price plunges by Rs1,400 per tola in Pakistan.
  • Price settles at Rs195,600 per tola.
  • Silver prices in the domestic market remain unchanged.

Gold prices slipped nearly 1% on Wednesday, weighed down by a jump in the rupee and hopes of revival of the International Monetary Fund (IMF) programme that could influence the economic scenario.

According to the data released by the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) plunged by Rs1,400 per tola and Rs1,200 per 10 grams to settle at Rs195,600 and Rs167,695, respectively.

The bargain hunters took advantage of recent losses, but the precious metal’s outlook was still clouded by prospects of further recovery of the rupee against the greenback as optimism regarding the revival of the IMF programme can boost the currency market’s sentiment.

Cumulatively, the yellow metal gained Rs3,800 per tola during the last three sessions; however, the precious commodity snapped its winning streak today.

Meanwhile, silver prices in the domestic market remained unchanged at Rs2,150 per tola and Rs1,843.27 per 10 grams, respectively.

In the international market, gold price rose by $8 per ounce to settle at $1,840 as investors held off on big bets ahead of minutes from the US Federal Reserve’s latest policy meeting that could offer more cues on its rate-hike path.

“The market focus is on the Fed minutes which will be released later today but if there’s concerns about higher inflation or more persisting inflation scenarios then we could see gold prices potentially facing some headwinds,” Bank of China International analyst Xiao Fu said.

Minutes of the Fed’s latest meeting are due at 1900 GMT on Wednesday. The Fed raised rates by 25 basis points at its Jan. 31-Feb. 1 meeting, and is expected to raise benchmark rates above 5% by May with a peak seen at 5.347% in July.

Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion.

Gold may retest a support of $1,830 per ounce, a break below which could open the way to $1,816, according to Reuters technical analyst Wang Tao.

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Robust activity lets PSX climb above 115,000 level again.

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On Friday, the Pakistan Stock Exchange (PSX) resumed its upward trend, crossing 115,000 points once more.

The PSX had strong action in the morning session, as the KSE-100 index increased by 1,000 points to 115,138.

The notoriously volatile PSX closed Thursday at 114,037 points, up 594 points.

DOLLAR DEPRECIES

Meanwhile, in the interbank market this morning, the US dollar fell 7 paisas to Rs278.65 against the Pakistani rupee.

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SBP will announce monetary policy on January 27.

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The State Bank of Pakistan (SBP) will release its monetary policy on Monday.

The Monetary Policy Committee (MPC) of the SBP will convene on the first day of the following week to make decisions on monetary policy.

The Monetary Policy decision will be announced by Governor SBP Jameel Ahmad at a news conference on the same day after the MPC meeting, according to an official release.

In December, the central bank reduced policy rates by 200 basis points (bps) to 13 percent.

“In November 2024, headline inflation fell to 4.9 percent year on year, meeting the MPC’s estimates. This decrease was mostly caused by the ongoing decline in food inflation and the phasing out of the impact of the gas tariff increase in November 2023,” SBP stated in an official release.

“However, the Committee noted that core inflation, at 9.7 percent, is proving to be sticky, while consumer and business inflation expectations remain volatile.” To that end, the Committee restated its previous assessment that inflation may remain volatile in the short term before stabilizing within the target range.

“At the same time, growth prospects have slightly improved, as evidenced by a recent increase in high-frequency indicators of economic activity.” Overall, the Committee concluded that its approach of gradual policy rate decreases is keeping inflationary and external account pressures under control while promoting long-term economic growth.

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Finance Minister Meets With World Leaders at World Economic Forum in Davos

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During his attendance at the World Economic Forum in Davos, Switzerland, Finance Minister Muhammad Aurangzeb has met with officials of organisations and leaders of many nations.
Bangladesh’s Chief Advisor, Muhammad Younas, met with Mohammad Aurangzeb.
On the fringes of the World Economic Forum’s Annual Meeting 2025 Opening Banquet, there was an informal meeting.
Additionally, the Finance Minister met with Anwar Ibrahim, the Prime Minister of Malaysia.
Both leaders discussed economic cooperation and bilateral ties.
Muhammad Aurangzeb also had a meeting with Dp World’s Rizwan Soomro and Yuvraj Narayan.
They talked about how to strengthen Pakistan’s logistics and infrastructure systems to support trade.
“The Pakistani government is committed to advancing joint projects and values partnerships in both business-to-business and business-to-government cooperation,” the finance minister added.

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