The gold has been used as a currency for last many centuries as its significance and lasting value was evident since time immemorial .Therefore, Lydian empire was the first to mint the first gold coins for commercial usage.
The reign of Prophet Solomon (961-922 BC) also included gold, silver, and copper deposits and it was found in a recent study carried out in Mahd Adh Dhahab (translated as Cradle of Gold) mine in Saudi Arabia. This investigation revealed objects belonging to the Prophet Solomon.
The importance of gold can also be seen from the ruins of the ancient Egyptian civilization having excessive usage in tombs and temples belonging to 5,000 years old era. If we talk about modern times, it is extremely popular option in countries like Pakistan. People love to have gold ornaments and also use it an investment option. And especially, when its value has improved in last few years.
If you are gold investor, then keep reading as we will also analyze factors that could impact 1 tola gold price in Pakistan.
Last Week Gold Market Performance
The 1 tola gold price in Pakistan (24K) started the week at Rs. 210,200 and ended the week at Rs 215,035.
1. Economic Data can affect gold prices
The main European stock market started the new week carefully, however with an overall positive sentiment prevalent, as investors expect potential interest rate reductions by both the European Central Bank (ECB) and the Federal Reserve to bolster the regional economic recovery.
In light of this, gold investors will closely analyze the release of gross domestic product (GDP) data for the fourth quarter in the Eurozone, France, and Germany. Poor figures will increase pressure on ECB officials to implement monetary policy easing measures.
The current economic situation will raise US gold prices and could eventually lead to an upsurge in the 1 tola gold price in Pakistan. Hence, it appears to be an appropriate moment for investors to consider allocating their funds in the bullion market.
2. Recent Rupee Rise will Affect 1 tola gold price in Pakistan
The Pakistani rupee exhibited a considerable improvement as compared to the US dollar in the ongoing week. The pak rupee rose by Rs0.07 in the inter-bank market. Consequently, the PKR currency now stands at approximately 279.52.
Similarly, the Pakistani currency also showed an upward trend in the last week, gaining approximately Rs0.31 and settling at 279.59 against the US dollar in the inter-bank market. This rise was mainly due to the approval of the 2nd installment of the $3 billion Stand-by Arrangement (SBA) for the international financial institution.
Gold experts believe that this currency appreciation is bad for the bullion market and will decrease the 1 tola gold price in Pakistan.
3. Pakistan Need Long term Economic Policy
According to a recent IMF report, Pakistani GDP has been revised down for the financial year 2024 to 2 %. This change marked a decrease of 0.5 % points from the 2.5 % estimate given in the last year’s outlook.
The IMF’s World Economic Outlook (WEO) for January indicates that the latest growth forecast falls below the government’s target of 3.5 percent GDP growth for the current year.
However, there is a very good possibility of an economic slowdown as growth rate has been quite slow and there are considerable risks for the economy. Therefore, there is a chance of interest rate increase as economic managers want to control inflation in the long term.
As per the gold experts, it is the best time for precious metals investors to take advantage of the current conditions and invest in gold. It will happen as the demand for safe-haven option is increasing, causing an increase in the value of precious metals and perhaps affecting the 1 tola gold price in Pakistan.
4. High Inflation Will Increase 1Tola Gold Price in Pakistan
On Monday, Pakistan’s central bank maintained its key interest rate at 22% for the fifth consecutive policy meeting and revised its annual inflation forecasts upwards. The governor of the State Bank of Pakistan justified this decision citing “elevated” inflation, which stood at 29.7% in December. He attributed the increase in the bank’s average inflation forecast for the fiscal year ending in June, now projected at 23-25% compared to the previous estimate of 20-22%, to escalating prices of gas and electricity.
Experts believe that 1 tola gold price in Pakistan could increase in next few weeks due to high inflation in the country. Since, high inflation is mostly proves to be beneficial for the bullion market.
Pakistani investors should keep in mind that it is best time to invest in the gold as the country is passing through political instability and uncertainty. Therefore, experts believe that after consulting with appropriate brokers and experts, they can invest in the gold bullion market.
They also say that considering the rise in the price and value of 1 tola of gold in Pakistan from 129,000 to well above 200,000 Pakistani Rupees in just last 2 years, opting for investments in gold bullion seems to be a feasible option.