Gold rises Rs1,000 on global fluctuations

Gold prices in Pakistan rose again on Wednesday after a dip, mirroring an increase in international rates. In the local market, the price of gold per tola reached Rs275,900, reflecting a single-day rise of Rs1,000, according to data from the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

This follows a drop on Tuesday when the price of gold per tola declined by Rs2,100 in the domestic market.

On the international front, gold prices climbed, with the rate reaching $2,647 per ounce after a $10 increase during the day, as reported by the APGJSA.

Adnan Agar, Director at Interactive Commodities, noted that the day's fluctuations remained within a range as the gold market awaited the US monetary policy announcement, scheduled for midnight Pakistan time. He added that the policy is expected to have positive implications.

Later in the day, international gold prices edged lower as the dollar held firm on Wednesday, with investors awaiting a key US Federal Reserve decision. Spot gold slipped 0.3% to $2,637.13 per ounce, while US gold futures were down 0.3% at $2,653.20.

Meanwhile, the rupee remained relatively stable against the US dollar in the interbank market on Wednesday, appreciating slightly by 0.01%. The currency closed at 278.23, gaining Re0.04 compared to Tuesday's closing rate of 278.27, according to the State Bank of Pakistan (SBP). However, the rupee depreciated in the open market, where it was valued at 277.38, compared to 277.35 on Tuesday, reflecting a slight decrease of 0.03 rupees, or approximately 0.01%.

Currency market expert Malik Bostan linked the rupee's depreciation in the open market to a sharp decline in the Pakistan Stock Exchange (PSX). The KSE-100 Index recorded its largest single-day point drop, closing at 111,070, down 3.3% (-3,790 points) due to institutional profit-taking, according to Ali Najib, Head of Sales at Insight Securities.

Bostan further noted that while the rupee had appreciated over the last two days, it depreciated today as banks settled annual payments and foreign investors converted rupee profits into dollars earlier than expected.

Additionally, repatriation of profits and dividends in Pakistan stood at $321.6 million in November 2024, marking a significant 586% year-on-year (YoY) increase, though it declined by 22.3% month-on-month (MoM). For the first five months of FY25, cumulative repatriations surged by 112% YoY, reaching $1,128.8 million.

Sana Tawfiq, Head of Research at AHL, explained that the YoY increase was due to a low base effect from last year when the government had delayed profit payments to foreign nationals, investors, and sponsors to stabilise the rupee-dollar parity. These backlogged payments were cleared in the last quarter of FY24 (April to June 2023). The MoM decline, however, was attributed to reduced interest payouts following the SBP's recent policy rate cut of 200 basis points to 13%.