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Gold price plummets by Rs4,300 per tola in Pakistan

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  • Gold price settles at Rs134,200 per tola.
  • Price has declined by Rs9,300 per tola since August 10.
  • Gold is cheaper by Rs7,500 per tola compared to its price in Dubai.

KARACHI: In line with the international market, the price of gold plunged by a whopping 3.1% in the domestic market amid no demand from consumers.

Data released by the All Sindh Sarafa Jewellers Association (ASSJA) showed that the gold prices in the local market recorded a decrease of Rs4,300 per tola and Rs3,686 per 10 grams to settle at Rs134,200 and Rs115,055.

The price of the precious commodity is declining because of the continuous appreciation of the Pakistan rupee against the US dollar — which has recovered nearly 12% or Rs26 — and fading concerns regarding the deepening economic crisis.

Cumulatively, the precious commodity has lost Rs9,300 per tola since August 10.

The dealers had already anticipated the market to undergo a correction after the precious commodity scaled to new peaks. The gold hit an all-time high of Rs162,500 per tola on July 28.

Pakistan is a small market for gold at the global level. It meets the commodity’s demand through imports as it does not produce the commodity locally.

Accordingly, the gold price for local markets is determined by keeping in view its prices in world markets, rupee-dollar exchange rate, and demand and supply in domestic markets.

It should be noted that the gold price is standing below cost. Gold is cheaper by Rs7,500 per tola compared to its price in Dubai.

In the international market, bullion prices slid $27 per ounce to settle at $1,775 as investors turned cautious in the run-up to minutes of the previous US Federal Reserve policy meeting amid hawkish comments from the central bank officials.

Meanwhile, silver prices in the domestic market shed Rs20 per tola and Rs17.14 per 10 grams to settle at Rs1,540 and Rs1,320.30 today.

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The International Monetary Fund (IMF) and Pakistan have initiated discussions at the policy level.

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The International Monetary Fund (IMF) and Pakistan will commence policy-level discussions today (Monday), as financially-strained Islamabad aims to secure another agreement with the Washington-based lender while satisfying all the stringent requirements associated with it.

The negotiations will primarily focus on deciding the magnitude of the upcoming IMF programme, establishing the corresponding terms and conditions, and defining the objectives and aims for the next budget.

Simultaneously, both parties will establish the macroeconomic objectives for the upcoming fiscal year’s budget. The IMF is determined to enforce policies such as monetary tightening (raising interest rates), increasing energy tariffs, adopting a market-based exchange rate, and implementing privatisation.

The expectation is that both parties will conclude the negotiations during the current week and finalise a staff-level agreement, which will then be subject to the ultimate approval of the IMF Executive Board.

A significant number of experts argue that the International Monetary Fund (IMF) has proposed a misguided policy of increasing interest rates, which has severely damaged the economy of the country. Consequently, it is imperative for the State Bank of Pakistan to promptly initiate a cycle of reducing interest rates.

They believe that the existing monetary policy will result in an overwhelming accumulation of debt and taxes, which will hinder the revival of economic activity and investment. This outcome has already been evident to all.

Despite the prevailing cost of living crisis in Pakistan, the IMF is insisting on raising the minimum energy bill, citing its necessity in managing the escalating circular debt.

However, due to the stringent conditions imposed by the IMF and Pakistan’s inability to address the issues in the energy sector, as well as the nature of agreements made with independent power producers (IPPs), the country is unable to benefit from the decline in global prices of solar panels and related equipment.

Further information: Should I choose solar power or not? The inefficiency of the energy sector provides a compelling reason to reconsider the solar energy policy.

Pakistan and the MF initiated discussions on both the Extended Fund Facility (EFF) and climate funding. Pakistan is seeking a larger and more extensive bailout package to stabilise and revitalise its economy.

According to sources, it has been stated that the two parties have reached an agreement on the significant objectives outlined for the forthcoming budget, which encompass the punctual settlement of foreign debt obligations.

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Pakistan’s gold prices are still declining; see the most recent

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The price of 10-gram gold reduced by Rs943 to settle at Rs207,733, while the price of gold dropped by Rs1200 to close at Rs242,300 a tola, according to the Sindh Sarafa Jewellers Association.

In the global market, the price of the precious metal fell by $10 to $2,349 per ounce, resulting in losses.

At 04:48 GMT, the spot price of gold had dropped by 0.2% to $2,354.77 per ounce. In the previous session, prices reached a two-week high.

American gold futures dropped 0.6% to $2,361.

Spot silver decreased by 0.4% to $28.03 per ounce, while palladium remained steady at $978.03 and platinum decreased by 0.1% to $992.89.

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Pakistan and the IMF begin talks for a new loan.

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Pakistan is requesting a $6 to $8 billion bailout package from the international lender over the next three to four years to address its financial troubles.

A mission team led by Nathan Porter, the IMF’s Mission Chief in Pakistan, is meeting with a Pakistani delegation led by Finance Minister Muhammad Aurangzeb.

According to sources familiar with the situation, Islamabad may face more difficult options, such as raising power and gas bills.

Mr. Aurganzeb informed the IMF team that the country’s economy has improved as a result of the IMF loan package, and Islamabad is ready to sign a new loan programme to further develop.

The IMF mission expressed satisfaction with Islamabad’s efforts to revive the country’s struggling economy.

The IMF praised Pakistan’s economic growth in its staff report earlier this week, but warned that the outlook remains challenging, with very high downside risks.

The country nearly avoided collapse last summer, and its $350 billion economy has stabilized since the end of the last IMF program, with inflation falling to roughly 17% in April from a record high of 38% last May.

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