Over 4,000 years ago, the Ancient Egyptians were the first to stumble upon gold, and our enduring enchantment with its enigmatic allure persists today. In the 21st century, gold isn’t just used for its industrial applications but is also taken as an investment option, acting as a medium to save wealth, guard against inflation, and get protection during recessionary periods. If we talk about Pakistan, 1 tola gold price in Pakistan soared to an all-time high of Rs 240000 in 2023. Therefore, this trend made precious metals more attractive to Pakistani investors. If you are one of these investors, then keep reading as we will explore the factors that influence 1 tola gold price in Pakistan. It will make your investing job easy even during the time of the current recessionary period.
Last Week’s Gold Market Performance
The 1 tola gold price in Pakistan (24K) started the week at Rs 233500 and ended the week at Rs 210000.
1. Federal Reserve Policies will affect 1 tola gold price in Pakistan
Gold prices were little changed on Tuesday, as the dollar held steady ahead of key inflation data later this week. Copper prices, on the other hand, held on to recent gains, as investors hoped that the worst was over for China’s economy.
Gold prices had found some relief in recent sessions, as the dollar retreated from a near six-month high. However, the US dollar remained stable on Tuesday, depicting that gold prices could continue to face pressure in the upcoming months. It is because rising interest rates make gold, which does not pay interest, a less attractive investment.
Copper prices, on the other hand, were supported by hopes that China’s economy was stabilizing. China is a major consumer of copper, and its economic slowdown has weighed on prices in recent months. However, recent data has shown that China’s economy may be starting to recover, which has boosted copper prices.
Here, analysts believe that a strong U.S. would also put pressure on the 1 tola gold price in Pakistan.
2. PKR Devaluation will influence Precious Metals Market
Currency experts say that the recent recovery of the Pakistani rupee is due to the government’s crackdown on illegal currency activities. These activities include hoarding, smuggling, and black market trading. The government’s efforts have helped to stabilize the exchange rate and make the official exchange rate more attractive and reliable for traders and investors. Experts believe that this situation will put more pressure on the 1 tola gold price in Pakistan and therefore, it will decrease more this week.
3. State Bank is planning to increase interest rates to contain the mounting Inflation
The inflation rate decreased marginally in August 2023 but is still quite high. Therefore, the State Bank of Pakistan is planning to increase interest rates in the next meeting to curb the mounting inflation and also to improve the decreasing Forex reserves that have caused the rupee to fall to record lows.
Gold experts think that a high inflation rate will favor the market as we might see an increase in the 1 tola gold price in Pakistan.
4. The Troubling Economy will affect 1 Tola Gold Price in Pakistan
Pakistan is facing a number of economic challenges, including high inflation, unemployment, a current account deficit, fiscal deficits, currency depreciation, mounting external debt, and dwindling foreign exchange reserves. The short-term economic position is dependent on a loan from the International Monetary Fund (IMF). However, Pakistan has struggled to fulfill the IMF’s demands including increasing electricity tariffs, executing budget cuts, anti-corruption measures, imposing levies on petroleum products, and increasing tax collection.
Pakistan is required to invest in key sectors and human capital development to get long-term economic strength. This means shifting focus away from military spending and prioritizing education and development. Reforms in expenditure patterns and sector prioritization are urgently needed to address the country’s economic challenges. This situation could potentially trigger public protests by his party members, further escalating the level of political uncertainty. Additionally, the price of 1 tola of gold in Pakistan is a matter of interest.
Pakistani Financial markets are extremely unpredictable and uncertain nowadays. Therefore, it is the perfect time to invest in gold. However, it is quite important to keep an eye on the above-mentioned factors and get reliable advice from experts. Since, sometimes fluctuations in the 1 tola gold price in Pakistan can make things tough.
Furthermore, investors believe that it is the perfect time to utilize various gold investment choices at your disposal to craft a tailor-made blend that aligns with your specific needs.