Gold possesses a lustrous, metallic quality and exhibits a remarkable ability to easily transform into bars, coins, or jewelry. Unlike many metals, it remains resistant to rust, corrosion, and decay, maintaining its enduring allure. However, its widely recognized global store of value and medium of exchange makes it valuable in the eyes of Pakistanis.If you are also also interested to invest in gold, then keep reading as we will explore the answers to these inquiries and delve into a deeper understanding of this precious metal and its respective roles. We will also analyze factors that 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. 215,700 and ended the week at Rs 217900.
1. US Economy Will Play Its Part
Gold prices stabilized over the past week amid ongoing expectations that the Federal Reserve will initiate interest rate cuts earlier in 2024.
The precious metal seemed to have settled into a trading range between the low-$2,000 and $2,050 per ounce, driven by increasing optimism regarding forthcoming reductions in interest rates. However, a surge in risk appetite led to limited capital flows into gold, as traders favored higher-yielding assets.
Nevertheless, gold prices held above the coveted $2,000 mark, and the gains this week brought them closer to the previous record highs of nearly $2,150 per ounce. The above mentioned economic environment will stabilize the gold prices in USA and could eventually increase the 1 tola gold price in Pakistan too.
2. PKR Devaluation will Increase 1 tola gold price in Pakistan
The Pakistani government’s efforts to control capital outflows through import and capital restrictions diverted remittance inflows away from formal channels, contributing to shortages of foreign currency. Howover,Pakistani rupee has shown some recobvery due to these actions.
Regarding future outlook, the World Bank anticipates a bleak economic scenario in Pakistan, with low expectations of positive growth as the IMF-supported program comes into effect. This pessimism is expected to impact public confidence, resulting in a projected 10% decline in remittances, falling below $22 billion in 2024.
The recent World Bank report expects an emergence of a thriving black market in countries such as Pakistan. It highlights how depreciation and exchange rate management policies have prompted migrants in Bangladesh, Pakistan, and Sri Lanka to exploit black-market premiums, facilitating the transfer of funds through both informal and formal channels.
Experts believe that this estimated currency depreciation will increase the 1 tola gold price in Pakistan and could be best time to invest in the bullion market.
3. Uncertain Economy will Increase Gold Prices
The nation is experiencing a rising tide of economic instability and uncertainty, with an economic instability and uncertainty .An unofficial survey indicating that 60 percent of Pakistanis have lost hope for a better future, underscoring a lack of confidence in the current leadership. The failed economic policies are causing Pakistan to sink further into crisis. Notably, none of the major political parties seem to possess a concrete economic agenda aimed at safeguarding the country’s economy and providing relief to the citizens. Inflation has reached unprecedented levels, shattering previous records.
The entire economic system now appears to be under the influence of the IMF, and the strict adherence to the IMF’s conditions by Pakistani leaders has made life exceedingly difficult. There is a growing perception that the current regime is more interested in achieving the IMF’s agenda than representing and protecting the interests of the people.
Therefore, it is the best time for gold investors to take advantage of the present environment and invest in gold. Since, it is the time when safe haven demand of the precious metals will increase 1 tola gold price in Pakistan.
4. High Inflation will increase gold demand
According to the renowned Newspaper “ The News’, weekly inflation rate in Pakistan remained constant at a six-month peak of 43.16 percent during the week ending December 14, with surging food prices continuing to impact consumers significantly.
The primary contributors to this inflation were food items, notably sugar, pulses, eggs, and rice, all of which experienced substantial price increases throughout the year, as highlighted by The News.
According to data from the Pakistan Bureau of Statistics (PBS), the Sensitive Price Indicator (SPI) showed a marginal 0.06 percent decrease week-on-week.
This marks the highest level since the week concluding on June 1, when the SPI inflation rate was reported at 43.17 percent, as detailed by The News.
Experts believe that 1 tola gold price in Pakistan could increase in next few weeks due to high inflation in the country. Therefore,it is better to invest in this precious metal.
Since the dawn of recorded history, gold has occupied a unique and esteemed position in the eyes of investors. Regarding investment, its allure lies in its ability to maintain strength during challenging financial conditions and serve as a hedge against the eroding effects of inflation on the value of fiat currencies.
Although the relationship among the U.S. dollar, other foreign currencies and gold has dissipated. Since the era of the gold standard, this precious metal retains a crucial role in the global economy.
Nonetheless, it is suggested to check with your financial consultant to confirm that any possible investments are in line with your overall long-term aims. Invest in valuable metals that could be a feasible choice in Pakistan as 1 tola gold price in Pakistan shown an increase from 129,000 to well over 200,000 Pakistani Rupees.