August 14, 2023 (MLN): Throughout the past week, domestic bullion prices remained relatively stable, with investor attention shifting towards risk-on assets in response to specific market developments.
The week concluded with 24-karat gold settling at a rate of Rs221,800 per tola, marking a modest weekly decline of Rs1,000 per tola or 0.45%.
While the price of 10 grams of 24-karat gold was recorded at Rs190,158 per tola, marking a decrease of Rs858 or 0.45% per tola from the preceding week's figures.
Furthermore, 10-gram 22-karat gold marked a weekly drop of Rs786 or 0.45% per tola to close at Rs174,783.
Risk-on Assets continue to steal the spotlight
The benchmark KSE-100 index has witnessed a wave of positivity after the approval of the long-standing Staff Level Agreement (SLA) worth $3 billion between International Monetary Fund (IMF) and Pakistan on June 30, yet it continues to steal the spotlight as investors retain their interest in the domestic stock market rather than risk-off assets like gold due to positive economic news.
The gas sector's circular debt burden is a matter of growing concern as it is estimated to have risen to Rs1.6 trillion, in order to reduce this, Pakistan has shared a plan with the IMF to contain the circular debt in the gas sector.
The plan involves the government injecting Rs414 billion as grants into Sui Northern and Sui Southern gas companies with which they would clear outstanding liabilities to OGDCL, PPL and GHPL, the gas producers.
In response, these gas-producing companies would give Rs475bn in dividends to the government which would help reduce the sector's debt burden by approximately Rs543bn.
Additionally, the local bourse benefitted from the massive substantial growth in earnings from the banking sector.
Moreover, the latest report from Morgan Stanley Capital International (MSCI) revealed the inclusion of 15 new Pakistani scrips to its Frontier Market Index.
These developments not only attracted investors but also firmly directed their focus toward the PSX.
To note, gold prices have witnessed a decline of Rs400 MTD, while the commodity gained 2.87% or Rs6,200 per tola during July.
PKR and Gold Prices
While addressing the relationship between Pakistani Rupee (PKR) and gold prices it is noteworthy that the domestic currency experienced a depreciation of 1.53 rupees or 0.53% during the week, contrasting with the previous week's closing rate of 286.97 against the U.S. dollar.
PKR-denominated gold typically benefits from PKR depreciation against the U.S. dollar, however, this week saw a different trend as the decline in international prices outweighed the effect of PKR depreciation.
On the global front, International spot gold recorded a 1.48% decrease during the week, concluding at $1,913.82, with a weekly low of $1,911.
This decline in international prices also influenced the domestic market's gold prices.
International spot gold chart
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Posted on:2023-08-14T16:47:05+05:00
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