4 things Influencing 1 tola gold price in Pakistan


Gold is one of the ancient forms of investment internationally and especially in Pakistan. People love it for its long term value and appeal. In addition to that it is also considered a comparatively safe investment as compared to stocks or real estate.Pakistani investors mostly consider investing in gold as a reliable strategy for wealth generation and preservation. Moreover, it also plays an important role investment portfolio diversification. Additionally, its role as a security against inflation and economic recessions brands it as an attractive choice local investors.

But, possessing gold physical gold creates numerous challenges for investors as it can be extremely costly to purchase and requires secure storage limiting the accessibility for individual investors.

If you are gold investor, then keep reading as we will also analyze factors that could impact 1 tola gold price in Pakistan.

Last Week Gold Market Performance

The 1 tola gold price in Pakistan (24K) started the week at Rs. 215,035 and ended the week at Rs 209888.

1.   Global Economy will affect gold prices

The improvement in the US dollar value and employment has caused an upward movement in the Wall Street’s primary indices as S&P crossed important 5,000-point mark and Nasdaq Composite rose by 37.07 points to reach 15,793.72 mark.

However, on the other side European stock markets have declined and oil prices have increased due to geo political conflicts in the Middle East. In Europe, the pan-European STOXX 600 index closed 0.1% lower. Losses in healthcare stocks offset gains driven by robust corporate updates from consumer staples companies such as Unilever and luxury brand Kering.

As per CME Group’s experts believe that it is highly unlikely that Fed will decrease rates in March, 2024.

On the other hand, yields on benchmark U.S. 10-year notes increased by 5.6 basis points to 4.154%, rising from 4.098%. Similarly, the 30-year bond yield rose by 4.5 basis points to 4.3541% from 4.309%.

According to experts in the field of gold investment, the present circumstances present an optimal opportunity for investors in precious metals to capitalize on. This recommendation is based on the rising demand for safe-haven assets, which is driving up the value of precious metals.

2.   Strong Rupee will Affect 1 tola gold price in Pakistan

Pakistani Rupee has showed some strength in last few months but as per Bloomberg report, its value is expected to decline reaching lowest value of Rs 350 per dollar till the end of 2024. The report shows that the PKR is estimated to be the worst-performing currency in Asia current year, with further weakening expected over the following 3 years. Experts believe that rupee has been weakened by Pakistan’s high inflation rates, trade deficit, loan payments, external financing gap, and decreasing external investments.

Additionally, the report also gave a warning about the expected scarcity of dollar in Pakistan, giving rise to parallel currency markets. It would be a dangerous situation as it would weaken the reliability of both the government and the current political administration, who is making an effort to bring down illegal currency trading for stabilizing the rupee.

Gold experts believe that this currency appreciation is bad for the bullion market and will decrease the 1 tola gold price in Pakistan. However, future is good for bullion market as Pakistani rupee will depreciate in near future.

3.      Pakistan Need Long term Economic Policy

Pakistan’s recent economic problems are stemmed from political instability, global inflation due to the COVID-19 pandemic, bad governance, and geopolitical conflict due to Ukraine-Russia War. Experts believe that these factors have put Pakistan into an economic and political turmoil further causing decline in purchasing power, and foreign exchange (FOREX) reserves.

At the forefront of Pakistan’s economic challenges is the significant depletion of its FOREX reserves. These reserves dropped to an extraordinary low level reaching US$ 3.19 billion last year, covering just two weeks’ worth of imports and falling well below the International Monetary Fund’s (IMF) suggested minimum reserve benchmark of three months. The uphill job of paying US $ 73 billion has further complicated the situation.

As per the gold experts, it is the best time for precious metals investors to take advantage of the current conditions and invest in gold. It will happen as the demand for safe-haven option is increasing, causing an increase in the value of precious metals and perhaps affecting the 1 tola gold price in Pakistan.

4.   Increasing Inflation will infleunce 1Tola Gold Price in Pakistan

Currently, Pakistan is going through a tough time as the inflation rate has crossed 30 percent and the debt-to-gross domestic product (GDP) ratio has risen to 72 percent. This is the most serious issue for the new government as it has to face the challenge of addressing this issue alongside an aging public infrastructure.

Gold experts believe that 1 tola gold price in Pakistan will increase in next few days due to extraordinary inflation rate in the country. Since, high inflation forces people o invest in the safe haven bullion market.

Final Words

Gold is a very good investment option for people who want to build a long term diversified portfolio .Since, they believe that it is silly to concentrate your wealth in one basket.

It is right approach to add gold into your investment portfolio as it provides a solid means of mitigating a risk. Bullion market normally shows an opposite relationship with many other investment options. Therefore, addition of gold to your portfolio can aid your diversify your investments and provide better protection for your money. Especially when 1 tola gold price in Pakistan has increased from 129,000 to well above 200,000 Pakistani Rupees in just last 2 years.

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