KARACHI: The gold prices recorded a significant gain of Rs2,800 in the local market to reach Rs145,200/tola on Tuesday as the Pakistani rupee plunged to the historic low.
Gold 24kt gained Rs2,800/tola and Rs2,400/10 grammes to hit Rs145,200/tola and Rs124,485/10 grammes, respectively.
The major increase in the prices of gold were recorded amid the record depreciation in the value of rupee to Rs221.99 due to renewed political and economic uncertainty in the country.
Pakistan is facing a serious turmoil on the political front after the coalition government faced a defeat in by-elections for 20 seats of the Punjab Assembly.
Panic buying was witnessed in the market as the investors and traders’ confidence was dampened by the uncertain political condition which pushed the local unit to another fresh low.
Coupled with the uncertainty on the domestic fronts, Fitch on Monday downgraded Pakistan’s outlook to negative from stable, while affirming its long-term foreign-currency (LTFC) issuer default rating (IDR) at B-, which further dented the market sentiments.
In a statement, Fitch Ratings said that the revision of the outlook to negative reflects a significant deterioration in Pakistan’s external liquidity position and financing conditions since early 2022.
The declining foreign exchange reserves of the country have also been a huge problem for the rupee to maintain stability against the dollar.
Pakistan’s total liquid foreign exchange reserves dropped $132 million to reach $15.611 during the week ended on July 7, compared with $15.742 billion on June 30.
The SBP’s reserves declined $99 million to $9.717 billion during the week ended on July 7, compared with $9.816 billion during the previous week. Similarly, the net foreign reserves held by commercial banks were also down $33 million to $5.893 billion.
The price of gold in the international market witnessed an increase of $2 per ounce to $1,717/ounce.
The price of silver recorded an increase of Rs10/tola to Rs1,580/tola while it gained Rs8.58/10 grammes to reach Rs1,354.60/10 grammes. The international silver prices were recorded at $18.90/ounce on Tuesday.
