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Saturday May 25, 2024

Gold prices power ahead amid persistent rupee rout

Price of gold (24 carats) jumps by Rs2,300 per tola to settle at Rs201,500

By Business Desk
March 14, 2023
An undated image of gold bars. — AFP
An undated image of gold bars. — AFP

Gold prices in Pakistan sustained their stellar run on Tuesday with the rupee losing ground against the US dollar amid economic concerns arising from thinning foreign reserves and a long-stalled bailout agreement with International Monetary Fund (IMF).

Data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) showed that the price of gold (24 carats) increased by Rs2,300 per tola and Rs1,972 per 10 grams to settle at Rs201,500 and Rs172,754.

The rupee extended losses against the US dollar, depreciating 0.24% in the inter-bank market on Tuesday, settling at 282.29, a decline of Re0.68, according to the State Bank of Pakistan (SBP).

Recent events show that gold remains a safe haven asset as it is able to benefit from market uncertainty.

Cumulatively, the yellow metal had shed Rs1,300 per tola during the last week — and it had only registered gains twice as the movement of Pakistani currency remains volatile.

Finance Minister Ishaq Dar last week said that the International Monetary Fund (IMF) was "satisfied" with Pakistan's actions but the staff-level agreement could not be signed this week.

"We seem to be very close to signing the staff-level agreement hopefully in the next few days," Dar said in his address during a seminar.

However, the finance minister, while citing his experience of completing 12 reviews of the "one and only" IMF programme Pakistan completed, shared that "it has taken longer than it should have" for Islamabad to complete the pending ninth review