Govt borrows Rs801.7b in auctions
The State Bank of Pakistan (SBP) raised a combined Rs801.7 billion through auctions of Pakistan Investment Bonds – Floating Rate (PFL) and Market Treasury Bills (MTBs) on Wednesday, reflecting strong liquidity in the banking system and sustained government reliance on domestic borrowing.
In the PFL auction, the government mobilised Rs48.44 billion, including accrued interest, against competitive bids for the 10-year tenor. Total acceptance, including non-competitive bids, stood slightly higher in face value terms, indicating selective participation in the end.
Meanwhile, the MTB auction saw significantly larger participation, with the SBP raising Rs753.26 billion (realised value) across one-, three-, six-, and 12-month tenors. The bulk of the borrowing was concentrated in shorter tenors, particularly the three-month paper, highlighting investor preference for shorter-duration instruments amid interest rate uncertainty.
Furthermore, the Pakistani rupee posted a marginal 0.01% gain against the US dollar, closing at 279.12 in the inter-bank market on Wednesday compared to 279.15 a day earlier. Meanwhile, gold prices in Pakistan jumped sharply, tracking gains in the international market, although the precious metal remained on course for its steepest monthly decline since the global financial crisis of October 2008.
In the local market, the price of gold per tola surged by Rs15,300 to settle at Rs494,062. Similarly, the price of 10 grams rose by Rs13,117 to Rs423,578, according to data released by the All-Pakistan Gems and Jewellers Sarafa Association. A day earlier, gold per tola had increased by Rs2,800 to close at Rs478,762. Silver prices also followed the upward trend, gaining Rs200 to reach Rs7,984 per tola.
Internationally, gold prices rebounded on Tuesday, with spot gold rising 3.2% to $4,652.31 per ounce by early afternoon trading in the US, marking its highest level since March 20. US gold futures settled 2.7% higher at $4,678.60 per ounce.
Despite the recent uptick, gold was still heading for its sharpest monthly decline in over 15 years, as persistent inflation concerns and expectations of prolonged higher interest rates continued to weigh on the non-yielding asset. The ongoing Middle East conflict further complicated the outlook, influencing investor sentiment across global markets.
Market participants were closely watching geopolitical developments, particularly an anticipated statement by US President Donald Trump regarding Iran, which could significantly impact gold prices.
According to Adnan Agar, Director at Interactive Commodities, gold was trading around $4,778, with key resistance in the $4,750-4,770 range. A sustained move above that level could push prices towards $5,950-6,000, while failure to hold may drag prices down to $4,500-4,600. Moreover, analysts at Goldman Sachs maintain a bullish long-term outlook, projecting gold to reach $5,400 per ounce by the end of 2026.