Copper declines marginally under pressure from the strength of the dollar and high oil prices

The Chinese Central Bank continued to increase its holdings of gold in September, extending its continuous purchases of the precious metal for the 23rd month in a row, according to official data issued on Wednesday, in an indication of Beijing’s continued trend to enhance its gold reserves despite the sharp fluctuations in prices this year.

The People's Bank of China's holdings rose to 77.47 million troy ounces of pure gold at the end of September, compared to 76.73 million troy ounces at the end of August.

China continued to buy gold despite the sharp fluctuations witnessed in its prices during the year, at a time when the prices of the precious metal fell by more than 6 percent during September.

The data showed that the dollar value of China's gold reserves fell to $323.52 billion at the end of September, from $350.08 billion at the end of August, as a result of the decline in prices despite the increase in the quantities held.

Gold in spot transactions was trading at about $4,147.47 per ounce by 02:44 GMT on Wednesday.

The Indian central bank raised the repo rate by 25 basis points to 5.5 percent, on Wednesday, in the first interest rate increase in nearly four years, as inflation risks rise and economic growth remains strong.

The Reserve Bank of India's decision came at a time when Indian markets are facing additional pressure from rising oil prices and tightening global financial conditions, in addition to the risks of rising food prices due to unfavorable weather conditions.

Sachidanand Shukla, chief economist at Larsen & Toubro Group in Mumbai, said that the 25 basis point rate hike was widely expected in the markets, but the central bank's change in position reflects an actual commitment to continue raising rates even if food or crude oil prices decline.

Radhika Rao, chief economist at DBS Bank in Singapore, said that the October decision reflects that the inflation risks associated with the economic cycle are no longer limited, noting that the change in monetary policy stance also confirms the Monetary Policy Committee’s direction towards greater tightening.

She added that the rise in oil prices, the tightening of global financial conditions, and the risks of food inflation resulting from unfavorable weather conditions, prompted policy makers to strengthen the credibility of the central bank in combating inflation before these risks become more entrenched.

The Pakistani government has provided fuel price subsidies to more than 9 million low-income people, in an attempt to mitigate the impact of rising energy prices on families, as the repercussions of the war between the United States and Iran continue to push fuel prices to higher levels.

The Minister of Information Technology, Shaza Fatima Khawaja, said on Tuesday that the program aims to alleviate the burdens on millions of citizens, at a time when geopolitical tensions in the region have led to a rise in global fuel prices.

She added that the government was keen to make the mechanism for benefiting from the program “smooth and flexible” for citizens, and described it as the first nationwide operation in Pakistan that uses technology to provide targeted fuel support.

The rise in gasoline and diesel prices has increased pressure on an economy suffering from a scarcity of liquidity and high inflation, which has affected the costs of transportation, food, and other living expenses, and raised fears of anti-government protests.

Prime Minister Shehbaz Sharif approved the program last month, and it provides discounts on fuel to owners of motorcycles, rickshaws, and small cars who are eligible for support, many of whom depend on their vehicles for work and daily transportation.

The announcement of support came after the Jamaat-e-Islami Party, one of the most prominent Islamic political parties in Pakistan, threatened to organize a march to Islamabad to pressure the government to reduce taxes on gasoline and diesel.

Fuel prices in Pakistan have risen by more than 50 percent since the outbreak of war between the United States and Iran earlier this year, increasing pressure on families already facing high costs of living.

Sharif's government said that the support aims to help low-income people buy gasoline at prices similar to those prevailing before the war.

Petroleum Minister Ali Parvez Malik said more than 9 million people benefit from the program, under which eligible vehicle owners receive a code via text message, then present it at a participating gas station, where attendants verify their eligibility before applying the discount.

According to the Ministry of Information and Communications Technology, the value of the support and the frequency of its disbursement vary according to the type of vehicle.

Motorcycle and three-wheeler users receive a discount of 500 rupees ($1.79) per week, with a maximum of four tokens per month, providing them with a subsidy of up to 2,000 rupees ($7.14) per month.

As for owners of cars whose engine capacity does not exceed 800 cubic centimetres, they receive a discount of 100 rupees (36 cents) per liter, for up to 10 liters of gasoline every 10 days. They can get three tokens per month, saving up to 3,000 rupees ($10.71).

Amir Shehzad, a resident of Islamabad, said that the support is sufficient to cover the costs of his transportation between home and work, but he added that if he needed to travel to another city, he would have to buy gasoline at the prevailing market price.

Pakistan relies heavily on loans from the International Monetary Fund, which demands that Islamabad reduce subsidies for wheat and other commodities.