The Pakistani rupee continued to strengthen against the US dollar on Wednesday, appreciating by 0.04% in the inter-bank market. By the end of trading, the rupee closed at 282.95, marking a rise of 10 paisa from the previous day's close at 283.05.
The local currency has benefited from a government crackdown on illegal dollar trading, which has bolstered its value. However, traders report that black market activity has quickly adapted, shifting to digital platforms and discreet home delivery services.
Since July 22, numerous unauthorised exchange outlets have been closed after the military intelligence agency summoned currency dealers to address the rising dollar rate in the open market. The move was followed by enforcement actions, led by the Federal Investigation Agency (FIA), tasked with combating financial crimes and smuggling. The rupee showed a notable strength against the US dollar in recent trading sessions as it gained Rs2.02 over the past six days, according to data from the State Bank of Pakistan (SBP) and AKD Research.
Meanwhile, gold prices in Pakistan marginally increased on Wednesday despite a decline in the international market as strong US economic data tampered expectations of imminent interest rate cuts by the Federal Reserve. According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold per tola rose by Rs300 to settle at Rs355,000. Meanwhile, the rate for 10 grams of gold stood at Rs304,355, down by Rs257.
In contrast, global gold prices slipped as robust US data reinforced the likelihood that the Fed would keep interest rates steady in its policy meeting and possibly delay any cuts for the remainder of the year.
On Tuesday, domestic gold prices had dropped by Rs1,600 per tola to Rs354,700. Globally, spot gold was down 0.6% at $3,306.57 per ounce, as of 1334 GMT. US gold futures fell 0.6% to $3,303.40, according to Reuters.
Interactive Commodities Director Adnan Agar said gold was trading at $3,290 per ounce, after hitting a high of $3,334 and low of $3,288 earlier in the day.
"Gold has come down," Agar noted, adding that the direction of prices will likely depend on the US Federal Reserve's policy statement, which is scheduled for release around midnight.
"If the announcement favours gold, we could see a rally. However, if the outcome is not supportive, prices may fall further, possibly to $3,260 or $3,250," he said.
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