Broad money supply rises 9.5% to Rs44.3tr

Pakistan's broad money supply (M2) recorded a 9.5% increase in the current fiscal year as of June 19, 2026, according to data released by the State Bank of Pakistan (SBP) and analysed by AKD Securities.

The money supply reached Rs44.3 trillion, up from Rs40.5 trillion at the end of the previous fiscal year. The growth was primarily driven by an 8% rise in scheduled bank deposits and a 13% increase to Rs12.05 trillion in the currency in circulation. Net domestic assets expanded 6%, supported by continued government borrowing. Economists believe that sustained high money supply growth could add pressure to inflation if not matched by a corresponding increase in economic output.

Meanwhile, the Pakistani rupee on Tuesday inched up Rs0.01 to Rs278.16 per US dollar in the inter-bank market.

Domestic gold prices declined significantly, mirroring losses in the international market, where the precious metal was heading for its sharpest quarterly drop in 13 years due to persistent inflationary concerns and expectations of a US Federal Reserve rate hike.

According to the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola fell Rs4,100 to Rs424,836. Similarly, the 10-gram gold was sold for Rs364,228 after a decline of Rs3,515. On Monday, the per-tola gold had already dropped by Rs2,300.

The local market movement tracked international trends. Spot gold eased 0.2% to $4,008.94 per ounce by 08:59 am ET (1259 GMT), having touched its lowest level since November earlier in the session. Prices slid 11.3% in June, as per Reuters. US gold futures dipped 0.4% to $4,022.70 per ounce.

The downward pressure stems from inflation worries linked to the ongoing Middle East conflict, which have reinforced market expectations that the US Fed may raise rates, making non-yielding assets like gold less attractive.

Meanwhile, silver prices bucked the trend, rising Rs25 to Rs6,349 per tola. Adnan Agar, Director at Interactive Commodities, noted that gold hit the low of $3,940 and the high of $4,060 during the session. It was later trading around $4,030. "The market is repeatedly coming down to the lower side; this $3,930-$3,950 area provides good support. It does bounce from here, rising by something like $100, but again there is weakness on the upside," he said.

Agar highlighted the potential downside risks, saying that a break below $3,900 could open the door for further decline towards $3,800 and $3,700. He suggested that the market might bottom out around $3,600 to $3,700 in the coming weeks or months.

On the geopolitical front, Agar pointed to the ongoing but uncertain negotiations between the US and Iran. "The market fears that there is a very high chance that the negotiations won't be successful, keeping uncertainty alive and exerting pressure on gold in the near term."