4 factors affecting 1 tola gold price in Pakistan this week
1 tola gold price in Pakistan is showing a rising trend especially since the removal of Imran khan administration in April 2022. Investors and speculators flock to buy gold as they know it is the best time to invest in it. The 1 tola gold price in Pakistan has increased from Rs. 129400 in March 2022 to Rs. 175,900 in December 2022. If you are also interested in the bullion market and what to know what actually is affecting its prices.Then, do read our article discussing 4 factors affecting gold prices in Pakistan this week.
Gold market is a good barometer to analyze the economic performance of a country. The price generally increases as the economic situation gets worse. Since gold is an independent commodity, it can serve as a good portfolio diversifier for investors.
The Pakistani economy performed very well in last two years but now situation has changed as the political crisis has crippled the Pakistani economy in last 10-11 months .The state bank has recently lowered its projected GDP growth from the previously announced range of 3-4 % for year 2022-23.Moreover, benchmark KSE 100 index has fell from 46387 points to 40,084.80 points in just last 10-11 months.
In addition to that, reeling economy might further fall due to the expected dissolution of the Punjab and Khyber Pakhtunkhwa assemblies next week and mounting political conflict. In addition, postponement of the IMF’s ninth review of the loan program also added fuel to the fire.
Under the former Finance Minister Miftah Ismail, Pakistan initiated the process of reforming the economy through eliminating untargeted subsidies, but once again economy is back on the path of financing these subsidies.Moreover, the government has decreased the prices of gasoline and diesel by Rs. 10 and Rs. 7.5, respectively. It is indeed a popular decision but will push the economy further into crisis. The Shehbaz Sharif administration might announce more such packages to win back their lost public support .
The Imran Khan administration received criticism for giving subsidies to industry but that was to encourage the businessmen to invest more in the economy. It beard fruits as Pakistan successfully improved its exports during fiscal years 2020-21 and 2021-22. However, current government has miserably failed to improve economic situation . Moreover,things are getting out of control with every passing day. Therefore,experts believe that 1 tola gold price in Pakistan will increase further in next few weeks .
Political uncertainty is taking its tool of the economy as PTI is threatening to dissolve provincial assemblies in KPK and Punjab. On the other hand ,federal government is determined to avert this tactic through governor rule or no confidence movement. But government must do its part to solve this situation before it’s too late .Meanwhile these developments are hurting investor confidence as KSE-100 index is at its lowest since 2018. Therefore, investors believe that this is an ideal time to invest in solid gold investments as they are expecting that 1 tola gold price in Pakistan will increase more in next few months.
Dollar Appreciation & Dareconomics failure
Finance minister doing his best to use Dareocnomics to peg down the rising dollar but till now has failed miserably . He has tried to put a brake on rising dollar through fixed exchange rate policy but of no use. Therefore, recently dollar has crossed Rs 226 per dollar .However, in reality dollar is available in market at 250 rs per dollar and that is quite alarming . The dollar price has risen from 181 Rs in April 2022 to 226 in December 2022. It is an alarming thing as it is 24 % devaluation of the currency. Retail investors think this is the best time to enter the bullion market as 1 tola gold price in Pakistan will certainly rise further in next few weeks.
Pakistani Gold dealers are worried about the rising gold prices in Pakistan as it is getting out of reach of common people. They think that it is increasing as large groups are investing illicit funds in gold for earning easy returns.
They have also asked finance minister Ishaq Dar to start a crackdown on individuals who are stockpiling the yellow metal. The reason why gold prices are at this level right now is speculation. Dealers believe that the ideal gold rate in Pakistan should be Rs152,000 per tola. And ,they have demanded harsh action against “parties” in charge of setting the rates.
Trade analysts believe that it is the best time to invest in the bullion market .As ,1 tola gold price in Pakistan might further increase in next few months due to the mentioned factors.