4 things Influencing 1 tola gold price in Pakistan

 

Gold has always been perceived as a symbol of fortune, authority, and dignity since time immemorial. People also used this precious metal as means of exchange in ancient times due to its intrinsic value. Moreover, it has also played an important role in bringing financial stability to the gold-backed currency system. In modern times, it is considered a safe haven asset during times of political and economic uncertainty. The same is the case with Pakistanis as they flock to the gold market in difficult economic situations. However, they have to take special care while investing in it as we often see sudden movements in the 1 tola gold price in Pakistan.

Experts have highlighted that multiple factors exert influence over both the domestic and global gold market. If you are engaged in researching these factors, please continue reading as we explore the various elements that will affect the 1 tola gold price in Pakistan this week.

Gold Market Performance Previous Week

The 1 tola gold price in Pakistan (24K) started the week at Rs 217000 and ended the week at Rs 216100.

International Demand will affect 1 tola gold price in Pakistan

The strength shown by the U.S. economy has reduced the attraction of gold as a safe haven investment. The upward movement of the first-quarter gross domestic product (GDP) has inspired bullion market investors to revise their U.S. recession predictions.

In addition to that, experts are anticipating a series of U.S. economic indicators such as nonfarm payrolls and business activity readings in the next few days. They are quite important as they will offer extra insights into the gold market. Furthermore, experts are expecting an increase in the interest rates in the upcoming Federal Reserve meeting on Wednesday. The increase in the interest rates will decrease the 1 tola gold price in Pakistan.

Stability Expected in the USD/PKR exchange rate 

Pakistan is passing through an extremely volatile economic and political situation. However, we might see some stability in the forex market after the approval of the IMF package as staff level agreement took place between the Pakistan government and IMF. But still, it is a long way to go as government needs to improve its financial discipline to get better long-term results.

The USD/PKR exchange rate initiated the week at Rs 286.55 and concluded at Rs 286.50. Experts believe that it is perfect time for gold investors as 1 tola gold price in Pakistan can increase anytime.

Reduction in Inflation Rate First time in last Seven Months

At last good news for Pakistan as it saw a reduction in the inflation rate for the first time in the last 7 months. This was mainly due to increase in the borrowing costs that resulted in demand reduction and the commodity prices.

The consumer prices rose by 29.40%  in June,2023 as compared to a similar period last year as per the Pakistan Bureau of Statistics data. Moreover, it was quite less than the Bloomberg survey median estimates of 30.8% and considerably lower than the record 37.97% rise in May 2023.

The decreased inflation rate was also due to the government’s decision to decrease fuel prices. Furthermore, the State Bank also unexpectedly increased its benchmark interest rate to a record 22% to control the inflationary risks connected with tax hikes and the elimination of import limitations.

Here, analysts think that peaked inflation will motivate investors and speculators to invest money in the bullion market and that will move the 1 tola gold price in Pakistan up.

4. IMF Staff Agreement Done 

Pakistan successfully obtained approval from the International Monetary Fund (IMF) for a $3 billion loan program in the final moments last week. This approval was granted after the Pakistani authorities fulfilled crucial requirements set by the IMF, leading to the lenders’ agreement. The provision of these funds will prevent a default, alleviate shortages, and offer some respite until the upcoming elections.

However, on the political side it is still long way to go as opposition party is planning to go on streets again. It is not a good sign for country as it will create more uncertainty. But will be good for bullion market as it will surely push 1 tola gold price in Pakistan upwards.

What to do?

As per bullion market experts, the gold value will rise in the next few weeks. Therefore it is the best time to hold this precious metal. They believe that gold will hold its value due to economic and political uncertainty According to experts, gold offers a reliable means of preserving value over time, and it holds a strong attraction for humans both physically and emotionally.

Gold is a precious metal that we would most likely rely on when other forms of currency become ineffective. Consequently, gold maintains its value not only in favourable economic circumstances but also during challenging times. Still, it is important for investors also to analyze global factors, especially the improving U.S. economy, as it directly affects the 1 tola gold price in Pakistan.