Gold falls Rs5,000/tola as global demand weakens
On June 27, 2025, the State Bank of Pakistan (SBP) injected Rs12.38 trillion into the financial system through two separate Open Market Operations (OMOs), aiming to address a liquidity shortfall driven by heightened Eid-related cash withdrawals and government financing needs constrained by IMF requirements.
The bulk of the injection came through a conventional reverse repo OMO, where the SBP accepted Rs12.20 trillion out of Rs12.42 trillion offered by banks. The funds were issued at a rate of 11.07% for a seven-day tenor. Of the 36 bids received, 34 were accepted, with rates ranging between 11.20% and 11.04%.
A second, Shariah-compliant Mudarabah-based OMO saw Rs178 billion accepted out of Rs326 billion offered, with a marginally higher rate of 11.13% for the same tenor. Only two bids were submitted and both were accepted, indicating limited participation from Islamic banking institutions.
Analysts attributed the surge in OMO injections to seasonal increases in currency circulation during Eid and a timing gap between debt repayments and incoming funds. They expect liquidity conditions to stabilise as fresh inflows arrive in the coming weeks.
Currency and Gold Markets React
In the interbank currency market, the Pakistani rupee edged down by 0.02% against the US dollar, closing at 283.72 on Friday—five paisas weaker than the previous day’s close of 283.67.
Meanwhile, gold prices in Pakistan tumbled, reflecting a global selloff triggered by renewed investor confidence following confirmation of a US-China trade agreement. The deal reduced demand for safe-haven assets like gold.
The All-Pakistan Gems and Jewellers Sarafa Association reported a Rs5,000 drop in the per tola price of gold, bringing it to Rs351,000. The 10-gram rate also fell by Rs4,287 to Rs300,925. This sharp decline followed a Rs1,335 per tola gain just a day earlier.
Adnan Agar, Director at Interactive Commodities, noted that gold touched an intra-day low of $3,255 on Friday and was trading around $3,276 after opening at $3,320. “The trend remains bearish,” he said, projecting a potential dip towards $3,213 before any short-term recovery.
He added that if similar trade agreements are reached with other major economies such as the European Union, gold prices could slide further to the $3,000–$2,800 range in the medium term. “Market sentiment is firmly on the downside, and pressure may persist into next week,” Agar concluded.
