Gold is often considered a secure investment option for individuals when other financial markets and economies are encountering difficulties. Additionally, during periods of inflation, gold is viewed as a safeguard against it. In situations where inflation rates exceed interest rates, investors tend to allocate their funds toward more stable investment options, and gold is one such choice.
Furthermore, gold can function as a protective measure during economic recessions. When stock markets experience declines, investors often turn to gold, causing its value to rise. Pakistani investors also love to invest in gold due to these reasons.
If you belong to this group of investors, continue reading, as we will examine the factors that impact 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 206000 and ended the week at Rs 218200.
1. Federal Reserve will affect 1 tola gold price in Pakistan
Gold prices are relatively stable these days as investors are waiting for the upcoming Federal Reserve meeting. In addition to that, strong U.S. economic data can push gold prices further below the $ 1900 mark in upcoming weeks. The U.S. central bank has retreated its stance time and again that it might increase interest rates due to robust economic and high inflation in the country.
However, it would be a bad omen for the gold investors as they might see gold prices fall below 1900 $ in the upcoming months.
Similarly, analysts also think that these things would also put pressure on the 1 tola gold price in Pakistan.
2. PKR Appreciation will influence the Precious Metals Market
Pakistan’s currency has garnered attention anew, but this instance is attributed to administrative actions that have led to the strengthening of the PKR in both the official interbank market and the open market. In the interbank market, the PKR has gained 4%, climbing from Rs307 to Rs296 against the USD. Simultaneously, in the open market, the PKR has surged by 10%, surmounting its value from Rs328 on September 4, 2023, to Rs298 as of September 18, 2023. 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 Kept Rates Unchanged
State Bank of Pakistan has surprisingly kept its interest rates unchanged, although experts were expecting a 150 basis points hike. Its authorities believe that it was quite necessary to speed up its efforts to curb inflation and stabilize the PKR.
State Bank of Pakistan has recognized the steep inflation increase but expects that it might decrease further in September 2023
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. Political Uncertainty affect 1 Tola Gold Price in Pakistan
Pakistan is passing through one of the most fascinating periods of its history. Currently, it is facing multiple kinds of challenges covering financial, political, societal, and strategic magnitudes. Neighboring countries like India and Bangladesh are going through a period of vigorous economic growth. Therefore, Pakistan’s leadership should recognize the need for a comprehensive policy framework to recognize and solve the issues preventing its development. The present government is trying to adopt a consistent economic policy through strict currency regulations but it is just a start.
Pakistan’s political landscape is also quite fluid as general elections are just around the corner. Imran Khan is still being arrested and that could potentially trigger public protests by his party members as they want him out before the elections. It is a perfect time for gold investors as 1 tola gold price in Pakistan could increase in the next few weeks.
The way people view gold has undergone significant transformations in the last twenty years. This shift is a result of increasing wealth in Eastern regions and a growing global recognition of gold’s significance in institutional investment portfolios.
Similarly, gold is also becoming popular among Pakistani investors as its value has really appreciated in the last year in Pakistan. 1 tola gold price in Pakistan has increased from 129000 to over 219000 since March 2022.