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Gold price plunges by Rs1,350 per tola in Pakistan

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  • Gold price per tola price settles at Rs129,200.
  • Retreat in international oil prices boosts risk appetite.
  • Silver prices in the domestic market gain Rs20 per tola.

KARACHI: Gold prices extended declines on Tuesday after a retreat in international oil prices and planned diplomatic talks between Russia and Ukraine boosted risk appetite.

According to the All Sindh Sarafa Jewellers Association (ASSJA), gold prices in the local bullion market dropped by Rs1,350 per tola to reach Rs129,200, while the price of 10 grams gold decreased by Rs1,157 to reach Rs110,768.

A day earlier, the precious commodity closed at Rs130,550per tola and Rs111,925 per 10 grams.

Speaking to Geo.tv, a gold dealer said that the price decline in the local market was in line with the international market as investors remained on the sidelines ahead of an expected rate hike from the Federal Reserve and as hopes for progress in Russia-Ukraine talks dampened the metal’s safe-haven appeal.

He was of the view that a decline in the international oil prices also triggered a decline, as according to the market analysis, both commodities move in the same direction.

“Since last few weeks, investors have been on the sidelines because of the uncertain market situation,” he said, adding that the market is reacting to the tiniest of the news reports.

Earlier, another gold dealer had said that Pakistan remains 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 its demand and supply in local markets.

In the international market, bullion prices plunged by $41 per ounce to settle at $1,925 as bets that the US Federal Reserve may raise interest rates for the first time in three years added to pressure on gold.

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 gained Rs20 per tola and Rs17.14 per 10 grams to settle at Rs1,500 and Rs1,286 today.

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An increase in tax was made on restaurant card payments.

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After 15 years, the SRB reduced the service tax that 58 hotels and restaurants in Karachi could have charged on debit and credit card purchases to 15%. This action is a part of the Sindh budget, which was designed to make eating out less expensive for customers.

Prior to this, Sindh’s tax on credit and debit card purchases was lowered from 15% to 8%.

Officials from the SRB have further stated that the service was made available for input adjustment of restaurant tax payments. With this step, businesses will be able to efficiently handle their tax responsibilities and the tax process would be made simpler.

Only a few eateries have been given authority to remove the lower tax rate, even though this tax facility has been reversed.

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The KSE-100 Index rises following a sharp decline in the previous session.

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The government is considering filing a treason case under Article 6 against PTI founder Imran Khan, former president Arif Alvi, and former deputy speaker Qasim Suri. On Tuesday, the KSE-100 Index was up more than 1.3% during early trading, following a day of roughly a 2 percent loss due to growing political unrest and the potential banning of the party.

However, the benchmark index of the Pakistan Stock Exchange was trading at 79,074.63 by 11:49 a.m., having gained 535.45 points, or 0.68 percent, after reaching an intraday high of 79,578.04.

Market analysts said that political tensions were the primary cause of the KSE-100’s earlier Monday decline of 1578.71 points, or 1.97 percent.

They did point out, though, that a correction was a reasonable reaction to the protracted upswing that allowed the benchmark mark index to reach 81,839.86 on July 18.

As a result of interest rate cuts and the possibility of another IMF program, the Pakistan Stock Exchange has gained 22.97 percent so far this year. The cycle began on June 10 with a 1.5 percent decrease in borrowing costs.

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In interbank trade, the US dollar crushes the Pakistani rupee.

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During interbank trade on Tuesday, the US dollar’s value increased by 15 paisas, reaching Rs 278.45.

It is important to remember that Fitch Business Monitor International expressed concern about the possibility that Pakistan’s economic stability may be jeopardized by the ongoing political unrest.

The fragile situation of Pakistan’s economic recovery was emphasized by Fitch in its most recent Pakistan Country Risk Report, which also noted that economic activity has been impeded by urban protests.

(PTI),In spite of multiple successful judicial appeals, the founder of Pakistan Tehreek-e-Insaaf (PTI) is expected to stay behind bars, the article notes, underscoring the fragile political environment.

With no urgent plans for new elections, this scenario suggests that the coalition administration will remain in office for the next 18 months.

Fitch also described an eventuality in which the government could change and be replaced by a technocratic administration. This suggests that the government of Pakistan would carry out the reforms demanded by the IMF, contributing to the 3.2% GDP growth expected in 2024–2025.

The policy rate has stabilized above projections, while the research predicted it may reach 16 percent this fiscal year and 14 percent the following year.

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