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Gold extends downward spiral in Pakistan

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  • Gold price declines by Rs700 per tola,
  • Per tola rate settles at Rs197,300.
  • Silver price remain unchanged.

Gold extended its downward spiral on Tuesday for the fourth consecutive session as the Pakistan rupee continues to strengthen against the US dollar in both — interbank and open markets — fading the shine of the yellow metal.

The price of gold (24 carats) fell by Rs700 per tola and Rs600 per 10 grams to settle at Rs197,300 and Rs169,153, respectively, according to All-Pakistan Sarafa Gems and Jewellers Association (APSGJA).

The price of yellow metal fell Rs9,200 per tola in four trading sessions which was more than the amount it cumulatively gained Rs5,900, or 3.03% per tola during the week ended March 4.

The price of gold is declining due to the strengthening of the rupee which settled at 277.87 against the US dollar in the interbank market today after a meagre increase of 0.02% compared to Monday’s close of 277.92.

The precious commodity scaled to an all-time high of 210,500 per tola on January 30, 2023; however, the gold price started receding after the rupee recovered on hopes of revival of the $6.5 billion International Monetary Fund (IMF) bailout programme.

It should be noted that Pakistan 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.

Meanwhile, silver prices in the domestic market remained unchanged at Rs2,140 per tola and Rs1,834.70 per 10 grams, respectively.

In the international market, the gold prices eased, as investors awaited Federal Reserve Chair Jerome Powell’s testimony later in the day for clues on the future path of US interest rate hikes. The price of per ounce gold settled at $1,842 after a decline of $7.

Prices have eased from a more than two-week peak of $1,858.19 hit on Monday but remained hemmed in a narrow range.

The dollar index gained 0.1%, making bullion less affordable for overseas buyers.

Powell is due to deliver his semi-annual testimony before Congress on Tuesday and Wednesday. The US jobs report for February is due on Friday.

Gold’s quest to extend gains is set to be heavily influenced this week by potential policy clues from Powell’s testimonies and the incoming US payrolls report, said Han Tan, chief market analyst at Exinity.

If Friday’s jobs data shows significant resilience in the US labour market, it would pave the way for even higher US rates and could unwind the month-to-date gains garnered so far by gold, Tan added.

Despite being known as an inflation hedge, higher interest rates dent bullion’s appeal as they increase the opportunity cost of holding a zero-yield asset.

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Tourism boom: During Eidul Azha, more than 400,000 people travel to KP

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Over 400,000 people travelled to several beautiful locations in Khyber Pakhtunkhwa between June 17 and June 19, celebrating the recently ended Eidul Azha festivities.

With over 174,000 visitors in one day, Naran Kaghan emerged as the most popular location. Visitors looking for a getaway from the city are still drawn to Naran Kaghan’s calm scenery and charming valleys.

A total of 162,000 visitors to Galiyat took in the city’s rich history at its cultural institutions and historical landmarks. In addition, more than 46,000 people visited Malam Jabba in Swat, and 23,000 people visited Upper Dir to take in its stunning surroundings.

Khyber Pakhtunkhwa is becoming a popular domestic vacation destination due to its unique combination of natural beauty, cultural legacy, and adventure options, as seen by the rise in visitor numbers.

Businesses and local government agencies have been collaborating to make sure tourists have an unforgettable time while appropriately handling the inflow.

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Pakistan currently has $14.41 billion in foreign exchange reserves.

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In a statement, the central bank stated that as of June 14, 2024, Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) stood at $9.135 billion, following the increase.

The announcement also stated, “SBP reserves increased by US$ 31 million to US$ 9,134.7 million during the week ended on June 14, 2024.”

The State Bank of Pakistan (SBP) stated that the nation had $14.415 billion in total liquid foreign reserves. Commercial banks own $5.28 billion of the total in net foreign reserves.

It was announced earlier on June 13 that Pakistan’s foreign exchange reserves reached US$14.38 billion, up US$168 million in the first week of June.

Pakistan’s reserves held by commercial banks rose by US$174 million to $5.28 billion for the week that ended on June 7, according to a statement released by the central bank.

The SBP now has US$9.10 billion in reserves, down US$6.2 million from before. The central bank did not provide an explanation for why its reserves fell.

“SBP reserves decreased by US$ 6 million to US$ 9,103.3 million during the week ended on July 7, 2024,” the SBP said in a statement.

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In a first for history, PSX crosses the 77,000 milestone.

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At 77,213.31, the benchmark KSE-100 hit an all-time high, up 1,005.15, or 1.32%, from the previous close of 76,208.16.

The government’s readiness to seal an agreement with the International Monetary Fund (IMF) following the budget was cited by analysts as the reason for the upward trend.

Experts anticipate that in an attempt to bolster its position for a fresh bailout agreement with the International Monetary Fund (IMF), the budget for the fiscal year ending in June 2025 would set aggressive fiscal goals.

Budget for Pakistan, 2024–2025
Pakistan’s budget for the fiscal year 2024–25, with a total expenditure of Rs18.877 trillion, was presented on Wednesday by Minister of Finance and Revenue Muhammad Aurangzeb.

The Finance Minister, Muhammad Aurangzeb, outlined the budget highlights. He stated that the GDP growth target for the fiscal year 2024–25 is set at 3.6 percent, while the inflation rate is anticipated to stay at 12 percent.

He stated that while the primary surplus is anticipated to be 1.0 percent of GDP during the review period, the budget deficit to GDP is forecast to be 6.9 percent over the period under review.

According to the minister, tax income collection increased by 38% in the current fiscal year, and the province will receive Rs7,438 billion. The Federal Board of income expects to earn Rs12,970 billion in revenue for the upcoming fiscal year.

In contrast to the federal government’s projected net income of Rs9,119 billion, he stated that the federation’s non-tax revenue projections are set at Rs3,587 billion.

The federal government’s total outlays are projected to be Rs18,877 billion, with interest payments accounting for the remaining Rs9,775 billion.

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