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Gold continues to shine, heads for major weekly rise

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  • Price settles at Rs153,000 per tola.
  • Gold price rise by Rs7,300 per tola during week ended Sept 10.
  • Silver prices in domestic market remain unchanged.

KARACHI: Gold was on course to gain for the week as concerns over the rupee devaluation and rising prices boosted its appeal as a safe haven and an inflation hedge, as prices increased on Saturday as the local currency hovered near an all-time low.

The price of gold has jumped by Rs1,300 per tola and Rs1,115 per 10 grams to Rs153,000 and Rs131,173 in Pakistan on Saturday. Cumulatively, the price of yellow metal surged by Rs7,300 per tola during the week ended September 10.

All Pakistan Sarafa Gems and Jewellers Association (APSGJA) determines local prices based on rupee-dollar parity at the open market — as the association members finance gold imports by buying dollars from the open market — and international rates.

In Pakistan, it seems that the larger the depreciation in the rupee at domestic “open markets” — compared to the interbank markets — the higher the price of gold.

It should be noted that the rupee has depreciated by over 10% in the current fiscal year 2023 (July 1, 2022 to date) to Rs228.18 against the US dollar at the interbank market. In the previous fiscal year (FY22), it dropped by 30% to Rs205.

Pakistan meets its domestic demand for gold through imports, as it does not produce the metal locally. At present, however, the country is importing a very small volume of bullion since the government has imposed tight conditions on imports to save foreign exchange reserves.

In the international market, the price of yellow metal declined by $4 per ounce to settle at $1,717.

Gold rates in Pakistan are around Rs4,000 below the cost compared to the rate in the Dubai market.

Meanwhile, silver prices in the domestic market remained unchanged at Rs1,540 per tola and Rs1,320.30 per 10 grams.

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Bulls Reenter PSX: The KSE-100 Rises More Than 886 Points

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As the market surged more than 800 points in the early morning trade, bulls grabbed control at the Pakistan Stock Exchange.

During the first trading session, the benchmark KSE-100 index increased by 886 points to 61,350.48 points.

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Pakistan’s steel prices are rising; get the latest figures here

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Another increase in steel prices has resulted in higher construction expenses in Pakistan. The economic downturn and continuous shipping delays have resulted in sharp price increases for building supplies, which has an effect on those who are planning to construct homes.

Due to increased manufacturing costs and supply chain interruptions brought on by the Middle East crisis, the price of iron, commonly known as steel rebar, has increased by Rs5,000 per ton. Local and imported steel rebar now costs between Rs240,000 and Rs260,000 per ton as a result of this most recent rise.

The cost of branded iron went from Rs255,000 to Rs260,000 per ton, while the cost of local iron climbed from Rs236,000 to Rs240,000. Furthermore, the cost of scrap or unprocessed iron has increased to Rs160,000 per ton inin the iron and steel markets.

The impact of the skyrocketing steel prices will be exacerbated by any more interruptions in the raw material supply chain. The cost of cement, on the other hand, has somewhat decreased and is at Rs 1,246 per bag.

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Up 30% to Rs 5.1 trillion by mid-February, FBR collected

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The total increase in domestic taxes has been around 40%, whilst import duties and associated levies increased by 16% between July 2023 and January 2024.

With the recovery of the GDP and increased inspection of FBR collection, the growth in revenues accelerated.

Up to mid-February, FBR receipts increased by 30% to Rs. 5.1 trillion. Nevertheless, decreases in import tariffs over time and, more recently, import license limits implemented by the State Bank of Pakistan (SBP) to manage the country’s balance of payments in the aftermath of foreign exchange shortages, were mostly responsible for the decline in the rise of import taxes.

However, the impact of improvements in import valuation, which resulted in collections of Rs 151 billion, as well as the anti-smuggling campaign, which saw a surge of about 69% in the current fiscal year over the previous one, are also included in the income collected from imports.

The statement said that there was room to improve anti-smuggling operations by considering expanding Baluchistan’s customs force, which now only has 378 anti-smuggling employees out of 20,000 total.

The mobilization of domestic tax income, which accounted for more than 64% of all revenues received in the current fiscal year, was hailed in the statement as a welcome change.

In parallel, the percentage of import duties has decreased to 36% from over 50% just three years prior. The main drivers of this increase in revenue were the several taxes sources. From Rs. 1,751 billion to Rs. 2,447 billion, income tax receipts increased significantly—by 40%.

Banks, the petroleum and oil lubricants (POL) business, the textile industry, the electricity sector, the food industry, and a number of service industries were among the major income tax payers. Up to mid-February, FBR receipts increased by 30% to Rs. 5.1 trillion. Notable rise was also seen in sales tax receipts, which increased by 19% from Rs. 1,480 billion to Rs. 1,766 billion.

POL, the electricity sector, the food sector, the automobile sector, the iron and steel sector, and the chemical sector were important growth drivers.

The amount collected in federal excise taxes increased significantly by 61%, from Rs. 190 billion to Rs. 307 billion.

Taxes on tobacco goods, the cement industry, drinks, airlines, fertilizers, and the automobile sector were the main causes of this increase. The amount collected in customs duties increased by 14%, from Rs. 552 billion to Rs. 629 billion.

The POL, automobile, iron and steel, electronics, and food industries were among the main donors to customs duties.

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