Precious Metals

4 things Influencing 1 tola gold price in Pakistan

If you’re thinking of investing in precious metals but uncertain about their suitability. Then, it’s worth noting that gold prices have reached record highs in last few years. Consequently, many individuals are considering these valuable commodities as investment options.

Investing in precious metals can offer various advantages and may be an attractive choice for investors. However, it is crucial to understand the potential risks and factors affecting 1 tola gold price in Pakistan before making a final decision. This blog will analyze the influential things affecting the bullion market, so that you can make an informed choice regarding your investments.

Gold experts have identified numerous factors exerting influence over both the local and international gold market. If you are currently involved in researching these factors, please keep reading as we explore the various elements that will affect the 1 tola gold price in Pakistan this week.

Last Week Gold Market Performance

The 1 tola gold price in Pakistan (24K) started the week at Rs 211000 and concluded the week at Rs 204000.

1.   U.S Monetary Policy will influence 1 tola gold price in Pakistan

However, Fed officials believe that they would still require to increase rates to counter high inflation. Therefore, experts are expecting a 25 basis point increase in the last two weeks of July 2023.

Climbing interest rates are bad for precious metals as they increase the opportunity cost of holding non-yielding assets. This thing will also hurt the market sentiments in the Pakistani market and might decrease the 1 tola gold price in Pakistan.

2.   Stability Expected in the USD/PKR exchange rate 

Pakistani rupee significantly rose against the U.S. dollar last Tuesday. As per details, its value appreciated by Rs 15 in the interbank market. This positive development followed the last-minute approval of funding by the International Monetary Fund (IMF) to support the financially strained country. According to the Forex Association of Pakistan, the dollar was initially trading at around 286 rupees in the interbank market when the market opened in the morning. However, it later dropped to approximately 271 rupees against the rupee.

Intikhab Ahmed from the Capital Investments firm attributed the rupee’s gains and the stock market’s appreciation to the IMF deal. However, it was emphasized that the market’s positive trajectory should be closely monitored throughout the week.

3.   Lowest Inflation Rate since October 2022

The weekly inflation rate in Pakistan, as measured by the SPI (Sensitive Price Index), has decreased to 29% for the week ending July 06, 2023. This marks the lowest level since October 20, 2022.

The decreased inflation rate was also due to the government’s decision to control prices by increasing interest rates.

Pakistani analysts believe that high inflation will force investors and speculators to invest money in the bullion market and that will raise the 1 tola gold prices in Pakistan.

4. Pakistani Economy After IMF Agreement 

Pakistan effectively convinced the IMF observers about their economic reforms and got the required approval from the International Monetary Fund (IMF) for getting $3 billion loan program some days ago. It was enough to influence IMF to sign a staff level agreement with Pakistani authorities. Pakistan has received another positive development as Fitch Ratings has upgraded its rating by one level, moving it from “CCC-” to “CCC”. This upgrade is indicative of Pakistan’s enhanced external liquidity and improved funding conditions, which have improved as a result of the staff level agreement reached with the International Monetary Fund (IMF).

However, PML-N government has to ensure that upcoming general elections 2023 would be held on time without any delay. In addition to that, it has to sit with opposition parties such as PTI to solve political issues.

What to do?

Investing in precious metals can be slightly more challenging compared to investing in stocks, but there are several excellent platforms that simplify the process.  Pakistan Mercantile Exchange Limited (formerly known as National Commodity Exchange Limited) is the first futures commodity market in Pakistan, with its registered Head office located in Karachi, Sindh. It stands as the sole company in Pakistan that offers a centralized and regulated platform for commodity futures trading. The exchange operates under the supervision and regulation of the Securities and Exchange Commission of Pakistan (SECP).

Do you want  solutions for your social and psychological problems?

Then Subscribe to our newsletter