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Gold plummets in Pakistan as Geneva moot pledges burst pricing bubble

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2 years ago

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  • Gold price plunges Rs3,300 per tola to settle Rs181,800.
  • Analysts had predicted that gold will see black-swan stumble.
  • Silver prices in domestic market rise Rs30 per tola.

Gold prices pared losses on Tuesday after Pakistan received flood aid pledges worth $11 billion at the one-day International Conference on Climate Resilient Pakistan in Geneva.

The announcement of inflow pledges burst the pricing bubble of the precious metal which had previously taken advantage of the dollar shortage and rupee depreciation.

Data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of gold plunged by Rs3,300 per tola and Rs2,829 per 10 grams to settle at Rs181,800 and Rs155,864.

Analysts had already predicted that the yellow metal will see a black-swan stumble as an inflow of $6-8 billion from multilateral and bilateral creditors will burst the pricing bubble in Pakistan.

Earlier, goldsmiths anticipated gold to touch Rs200,000 per tola due to the rupee devaluation against the US dollar under the current cycle. However, they now believe the price will fall below key level of Rs180,000 per tola.

They also mentioned that a majority of the buyers in the local market comprise gold investors these days. Earlier, they were parking their savings in the US dollar to avoid the impact of rupee devaluation at a time of high inflation.

They mentioned that the investors started moving to the bullion market following the shortfall of the dollar in the open market. In the black market, illegal traders were selling the dollar for Rs250-260 compared to Rs227 in the interbank market.

Meanwhile, silver prices in the domestic market rose Rs30 per tola and Rs25.71 per 10 grams to settle at Rs2,100 and Rs1,800.41.

In the international market, gold prices steadied near an eight-month high scaled in the last session, with cautious traders largely focusing on Federal Reserve Chair Jerome Powell’s upcoming speech for more insight into the US central bank’s rate-hike trajectory. The price settled at Rs1,876 per ounce after a rise of $5.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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