The Pakistani rupee continued its downward trajectory against the US dollar, weakening by 0.09% in the inter-bank market on Monday.
According to the State Bank of Pakistan (SBP), the local currency closed at 284.72, marking a depreciation of 26 paisa from the previous close. Last week, the rupee had also recorded losses, slipping by 49 paisa, or 0.17%, over the course of the week at 284.46 against the dollar.
Arif Habib Ltd Deputy Head of Trading Ali Najib told The Express Tribune that the weakness stems from persistent demand for the dollar amid rising import payments, profit repatriation by multinationals and cautious sentiment ahead of upcoming external debt repayments.
In addition, the SBP is also consistently buying the US dollar from the market, taking its intervention to over $6 billion in 8MFY25, a deliberate strategy to rebuild forex reserves, driven by strong remittances, IMF funding and debt rollover considerations.
Despite improving forex reserves, speculative activity and global dollar strength continue to weigh on the rupee.
"Without stronger inflows or policy tightening, the currency may face further mild depreciation in the short term," said Najib.
Meanwhile, gold prices in Pakistan recorded a mild increase on Monday, tracking gains in the international market, where the yellow metal steadied after hitting a three-week high amid renewed focus on trade tensions and upcoming US economic data. Meanwhile, silver surged to its highest level since September 2011.
According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold per tola rose by Rs1,600 to settle at Rs359,700. The price of 10-gram gold climbed by Rs1,371 to Rs308,384.
Spot silver gained 1.1% to $38.78 per ounce, hitting its highest level since September 2011 earlier in the session. The local rate was recorded at Rs4,087 per tola for 24-karat silver.
Analysts attributed the move to geopolitical and economic uncertainties. Interactive Commodities Director Adnan Agar said gold prices reacted to US President Donald Trump's comments about potential tariffs on Europe and Mexico.
"Gold touched a high of $3,375 and came down slightly to $3,345," Agar noted. "There's a chance it might dip before heading upwards again. With tariff discussions re-emerging, gold is expected to remain volatile in the coming days."
The international market's focus remains on trade developments and key macroeconomic indicators from the US, which could further shape the trajectory of precious metal prices globally and domestically.
Globally, spot gold was little changed at $3,356.95 per ounce, as of 1337 GMT, after reaching its highest point since June 23 earlier, according to Reuters.
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