Factors affecting gold price in Pakistan this week

Gold investment is a popular option in Pakistan as it is considered a safe-haven asset that retains its value over time even during political and economic turmoil. Currently,Pakistan is passing through its worst political and financial crisis making gold an ideal investment for an average investor . Therefore,1 tola gold price in Pakistan currently trading at its highest point of Rs. 195,400 as people are showing a tremendous interest in the bullion market.

If you are gold investor and want to know what will affect 1 tola gold price in Pakistan, then keep reading on as we would be discussing factors affecting bullion market in Pakistan this week.

Affect of Global gold demand and supply

The global demand and supply for gold plays a significant role in determining its price in Pakistan. High global demand directly increases the 1 tola gold price in Pakistan.

Market analysts believe that gold might experience a decline in demand during the next two to four weeks. As a result, they predict that in the coming weeks, global gold prices might go below $ 1800/ounce. The international gold market started the week at $ 1850/ounce and ended the week at 1809 /ounce. It indicates the decreasing gold prices trend in the international market.

The local Pakistani precious metals market will continue to be impacted by the trend towards declining global prices.

USD to PKR exchange rate

The US to PKR exchange rate has stabilized a little in the last week on the back of approval of Chinese loan of $ 700 million. The USD to PKR exchange rate  started the week at Rs 261 and ended the week at Rs 257. Pakistan has to import gold in order to fulfill its domestic demand. Therefore, appreciation in the rupee value decreases the bullion value in the country.

Now money experts again expect that dollar value might rise in upcoming days due to deteriorating local economic and political environment. And that can begin another good time for gold investors.

Inflationary trends and 1 tola gold price in Pakistan

Inflation is another factor that affects the 1 tola gold price in Pakistan. Retail prices of numerous household products increased sharply in the last week, driving the weekly inflation to over 40 %  that is highest in last five months. There are various items that saw a massive price jump. The list of these products includes cigarettes , chicken ,onions, eggs, rice, and fuel. The prices of onions (372 %), cigarettes (164.7 %, gas (108.38 %), and chicken (85.7 %) increased during the week.

Political  instability

Political crisis is at its peak as current PML-N led government is trying hard to avoid upcoming provincial KPK and Punjab assembly elections. The 13 parties’ government alliance is putting enormous pressure on courts to delay these elections. However, it doesn’t seem possible as 1973 constitution bars government to delay elections more than 90 days and if delayed can create serious constitutional crisis.

On the other hand ,PTI is putting pressure on government to announce national elections through its street agitation movement. Analysts believe that this political crisis will create more uncertainty. Therefore, it will push the 1 tola gold price in Pakistan upwards as more and more people will be interested  to buy bullion assets to diversify their risks.

Bottom Line

Before investing in gold, it is important to do your research and understand the risks involved. You should also consider the fees and charges associated with each investment option. Overall, gold investment can be a valuable addition to an investment portfolio, but investors should carefully consider the risks involved and seek professional advice before making any investment decisions.

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