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Tunisia Hopes to Reach Deal with IMF By End of October

A Tunisian woman is shopping in a store, while the sign in French prohibits buying more than one bottle of milk per buyer (Reuters)
A Tunisian woman is shopping in a store, while the sign in French prohibits buying more than one bottle of milk per buyer (Reuters)
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Tunisia Hopes to Reach Deal with IMF By End of October

A Tunisian woman is shopping in a store, while the sign in French prohibits buying more than one bottle of milk per buyer (Reuters)
A Tunisian woman is shopping in a store, while the sign in French prohibits buying more than one bottle of milk per buyer (Reuters)

Tunisia hopes to reach an agreement with the International Monetary Fund by the end of October, the government's spokesperson said on Friday, after a wage deal agreed with unions was seen as a key step towards getting IMF support.

"The Tunisian negotiating team was in contact yesterday with (the) IMF regarding the last terms of the agreement with the Fund," Nasreddine Nsibi, the government spokesperson, said.

"We seek to reach a deal with the IMF before the end of October, which would make Tunisia able to fulfill all its commitments, including providing food and energy products, paying wages and debt service," he added.

The government and the Tunisian General Labor Union (UGTT) on Thursday signed a deal to boost public sector wages by 5 percent, a step that may ease social tensions.

Fitch Ratings said on Friday that Tunisia’s wage agreement raises the likelihood of an IMF deal.

The IMF and major foreign donors want Tunisia to push ahead with cuts in subsidies and the restructuring of state-owned companies as well as steps to bring the public sector wage bill under control.

The IMF has signaled it will not move forward with a bailout sought by Tunis unless the government brings on board the UGTT, which says it has more than a million members and has previously shut down the economy in strikes.

The Tunisian government and the country's main labor union signed late Thursday a deal on wage increases. The agreement includes a 5-percent annual pay rise for civil servants until 2025.

On the sidelines of the signing, the Secretary General of the UGTT Noureddine Taboubi said that this agreement is the outcome of difficult negotiations.

According to Prime Minister Najla Bouden, the government is cooperating with the social partner to overcome the difficulties facing the country, such as the repercussions of the COVID-19 pandemic and the Russia-Ukraine conflict.

The prime minister added that the agreement is the fruit of the joint course of action between the government and the UGTT, the official Tunis Afrique Presse (TAP) has reported.

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Gold Eyes Best Quarter in over Eight Years

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
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Gold Eyes Best Quarter in over Eight Years

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)

Gold halted its record run on Friday but remained on track for its best quarter since 2016 after a rally catalysed by an outsized US Federal Reserve interest rate cut, while markets braced themselves for a crucial inflation report due later in the day.

Spot gold was down 0.1% at $2,666.50 per ounce as of 1115 GMT, below the all-time peak of $2,685.42 hit in the previous session. It is heading for its best quarter since the first three months of 2016.

US gold futures fell 0.2% to $2,688.90, Reuters reported.

"The market at this point in time has priced in all the good news and there's also some hesitancy from fresh buyers to get involved at these record high levels," said Ole Hansen, head of commodity strategy at Saxo Bank.

Bullion has risen 29% so far this year, hitting successive record peaks after last week's half-percentage-point cut by the Federal Reserve and the stimulus measures announced by China earlier this week.

Silver prices surged, tracking bullion's strong performance, though some analysts warn that the rally may fade.

"Overall, industrial demand is still supportive for silver. But we need to have a stronger economic performance in China as well as in other developed countries," said ANZ commodity strategist Soni Kumari.

The surge in silver prices is more a spillover impact from gold, Kumari said.

Spot silver eased 0.1% to $31.98 per ounce, after hitting its highest since December 2012 at $32.71 on Thursday. It is set for a third straight week of gains.

"I do believe silver will continue to outperform gold. But as we all know, wherever gold goes, silver tends to go, but faster," Hansen added.

Both gold and silver serve as safe-haven investments, but the latter has more industrial applications, so tends to underperform during recessions and outperform when economies expand.

Inflows into gold exchange-traded funds, particularly from Western investors, are set to rise in coming months, adding yet more positive stimulus for already record high bullion prices. Some banks expect gold to rise towards $3,000.

In other metals, platinum was up 0.5% at $1,012.40 but palladium fell nearly 1.5% to $1,031.75.