Gold has served as both a form of currency and a reliable asset for preserving value for countless centuries. Its track record demonstrates its effectiveness in safeguarding against inflation and economic uncertainty. Including gold in your investment portfolio can provide a safeguard against market volatility and the risk of currency devaluation. Pakistanis invest in this precious metal and earn handsome bucks by taking advantage of fluctuations in the 1 tola gold price in Pakistan.
1 tola gold price in Pakistan fluctuates with the passage of time but still it has shown ability to offer a protection against major market swings in the long term. Thus, it performs as a balancing power to nullify the unpredictability of investments such as shares, offering strength and diversification to your portfolio. If you are also thinking of entering the world of precious metals but don’t have the ability of market analysis, then keep reading on as we will discuss the four most important things affecting the 1 tola gold price in Pakistan. So, take a back seat and join us while we explore the favourable domain of gold investment in Pakistan.
Gold Market Performance last week
The 1 tola gold price in Pakistan (24K) started the week at Rs 226100 and ended the week at Rs 219000.
1.International gold demand and Supply
Gold has faced a considerable volatility in the last 4 weeks or so, but it has failed to come out of its thin price range mainly due to latest data and actions taken by central banks. Its price is currently hovering between $1,940 and $1,980, and there are no signs of this trend changing in the near future.
However, things can change fast after any surprising decision by the Federal Reserve and central banks related to the interest rate. But, as per latest news there is nothing radical expected from these institutions in next week. Right now, the focus is mainly improving the economy. Therefore, it is expected that international precious metals prices and 1 tola gold price in Pakistan would be stable in this week.
2.High USD to PKR exchange rate
Market analysts believe that the Pakistani rupee will further lose its value in the upcoming days mainly due to the ongoing political uncertainty and severe economic conditions. According to the latest statistics, the country’s forex reserves are currently standing at $ 4 billion and that is just equal to just one month’s import bill. It is an alarming situation and will put more pressure on already falling currency. The State Bank of Pakistan is not planning to control the currency as it will be damaging to the ailing economy.
The USD/PKR exchange rate started the week at Rs 287.50 and ended the week at Rs 287.42. It is a good time for the gold investors as they can earn handsome bucks as 1 tola gold price in Pakistan will rise on the back of the falling rupee.
3.Inflation is at its highest level in the last 75 years
The current inflationary trends in Pakistan will continue without any signs of improvement in near future. There was a small 20 % increase in inflation as per the latest weekly report. This has resulted in the annual inflation rate reaching an astonishing 34.96 per cent.
Individuals with a monthly income ranging from Rs17,733 to Rs22,888 have been disproportionately affected by the effects of inflation, with their inflation rate reaching 36.51 per cent. In this difficult situation, the prices of 19 essential goods have increased, while 12 have decreased, and 20 have remained unchanged.
Here, gold experts believe that high inflation will encourage to invest in the bullion market and that will push the 1 tola gold price in Pakistan upwards.
4.Pakistani Economy and Politics is uncertain
Right now Pakistan is going through a tough time as it is encountering a serious debt crisis as it has to payout numerous loan installments. But on the other hand it has limited monetary resources. In addition to that, the expectations of IMF bailout package are also diminishing with every passing day.
The country’s import-reliant economy has faced numerous challenges such as damaging floods, political uncertainty, and covid-19 supply-side issues. Consequently, Pakistan’s external loan burden is swelling while its foreign exchange reserves are dwindling.
Pakistan’s total external debt crossed critical figure of $126 billion at the end of 2022 A substantial component of the country’s proceeds is distributed for paying off both the debt principal and interest.
Pakistan is bound to pay $3.6 billion to its lenders in June. The SBP governor has recently revealed to the media that $400 million has been paid excluding rolled over amount of $2.3 billion. Still, Pakistan needs approx. $ 900 million more for this.
Additionally, the political uncertainty caused by confusing political strategy of PML-N led government will affect the 1 tola gold price in Pakistan in the current week.
What to do?
Experts have different opinion regarding the correct usage of gold, however they normally agree that it is the perfect option for creating diversified investment portfolio. As, it effectively faces the tough economic conditions, and adds stability to the overall investment portfolio.
However, it is extremely important to search out its advantages and disadvantages before entering in the precious metals market. Gold investment might not be suitable for everyone, but it is certainly worth trying especially in the current scenario. When 1 tola gold price in Pakistan is consistently rising due to economic and political uncertainty.
, with a high likelihood of an increase in the price of 1 tola gold in Pakistan. Nonetheless, it is essential for investors to also monitor global factors, particularly the improving state of the U.S. economy, as it directly impacts the price of 1 tola gold in PKR.