Reserves cross $23b on commercial loan

The SBP said its own holdings rose by $1,210 million during the week ended September 4, attributing the jump entirely to proceeds from a government of Pakistan's commercial loan, though it offered no further details on the lender, tenor, or terms of the borrowing.

Furthermore, the Pakistani rupee inched up and closed at 277.35 against the US dollar, a gain of Rs0.01 from Wednesday's settlement at 277.36.

Gold prices in Pakistan inched down on Thursday, moving in line with a sell-off in the international market after robust US inflation readings and rising oil prices increased bets that the Federal Reserve would raise interest rates next week.-Pakistan Gems and Jewellers Sarafa Association, the 24-karat gold fell Rs600 to Rs462,336 per tola.

Ten-gram gold was sold at Rs396,378 after a drop of Rs515. Internationally, spot gold slipped 1% to $4,355.85 an ounce by 1:42 pm EDT (1742 GMT),. Earlier in the session, bullion dropped about 1.7% to $4,323.78, the lowest level of the day.

The local association quoted the international rate at $4,398 an ounce, down $6. US August producer prices increased in line with expectations, with energy costs a major factor as crude prices rose. The combination lifted the market-implied chance of a September Fed rate hike to about 70%.

A stronger dollar and higher US Treasury yields added to pressure, because gold pays no yield and becomes less attractive when borrowing costs climb. The European Central Bank raised interest rates for the second time this year, reinforcing a tighter global policy tone.

Silver followed gold lower in the local market. The price per tola decreased Rs17 to Rs7,124, while 10 grams of silver fell Rs15 to Rs6,107. International silver was reported lower as well.

Traders will now watch Friday's US consumer price index and the Federal Reserve's September 15-16 meeting for the next clear signal on whether the recent pullback deepens or stabilises.