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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

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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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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