High Inflation and 1 Tola Gold Price in Pakistan

Gold is an extremely reliable and valuable investment option for the investors as it is on its highest level. It has recently crossed 2000 $ /ounce level and proving to be an extremely profitable asset for Pakistani investors .Moreover, local investors also consider it an extremely safe option, especially during current uncertain economic and political environment in the Pakistan. Thus, we conclude that it can be an amazing option for investors during present difficult situation in Pakistan and provides a very good opportunity for everyone planning to earn millions in profits in forthcoming years.

If you are also a gold investor and aiming to earn big, then keep reading as we will also identify factors that could affect 1 tola gold price in Pakistan in upcoming weeks.

1.   U.S Federal Reserve Policies will affect 1 tola gold price in Pakistan

Gold prices kept on falling yesterday and this decline made the costly metal surpassed a critical support level, along with markets expecting a possibly aggressive signals from the Federal Reserve yesterday.

The reduction in gold prices continued from the top levels and reached as reduced demand for assets, united with a reduction in global geopolitical tensions, exposed it to pressure from interest rate fluctuations.

The recently concluded Federal Reserve meeting will affect the bullion market in USA and also 1 tola gold price in Pakistan. The fed has decided to keep the rates at its current levels as inflation is still quite high than expected. Right now, interest rates are at highest levels in last 23-years. Continually, high interest rates are negative for bullion market, as they increase the opportunity cost of keeping the valuable metal. Reduced forecasts of rate cuts have added to the gold prices decline from their current record highs over the last fortnight.

Therefore, it is expected that 1 tola gold price in Pakistan will also increase in next few weeks due to international geo-political unrest.

2.   Rising Rupee will Affect Gold Prices

A decrease in the policy rate is anticipated to stimulate increased imports of goods, leading to heightened demand for the US dollar. The recent strengthening of the rupee has partially reversed the preceding depreciation trend, erasing losses by 0.46% or Rs1.28 over the past month, compared to the five-and-a-half-month high of Rs277.03/$ recorded in late March 2024.

Financial analysts have noted that the disbursement of the IMF tranche is expected to bolster Pakistan’s foreign exchange reserves to approximately $9 billion, thereby supporting the stability of the rupee in the short term.

Gold experts believe that this currency appreciation is not good for the bullion market and will decrease the 1 tola gold price in Pakistan. However, future holds good for gold market as Pakistani rupee will surely depreciate due to imports pressure in future months to come.

3.         Recession can be good for 1 Tola Gold price in Pakistan

The experts at finance ministry have forecasted that Pakistani economy would rebound from the current position in next few months. The IMF has predicted that the economy will grow at a reasonable rate of 2.5 % in 2024. The institute also anticipates a decrease in inflation rate from 29.2% in 2023 to 23.6% in the current year.

Moreover, the report estimates a decline in Pakistan’s unemployment rate from 8.5% to 8% in the 2025. But, it also estimates a rise in the current account deficit from 0.7% to 1.8% in 2024.

In the meantime, the IMF has painted a bad picture of the global economy but noted that it is slowly recovering. Expert believe that, it the best time for the gold investors as they can certainly benefit from this situation by raising their gold investments during high inflation and economic recession.

4.   High Inflationary Trends Will Increase 1 Tola Gold Price in Pakistan

The April,2024 inflation report brought an encouraging sign for the Pakistani economy as inflation was just above 17 % .Experts are anticipating a continued decline in the upcoming month. In its monthly update and outlook report for April 2024, the ministry attributed this downward trend to favorable base effects from the previous year and enhancements in the domestic supply chain of essential goods.

The federal government is aggressively executing strict executive actions to curtail inflation. The current rise in international crude oil prices has forced the government to modify domestic petrol prices up. However, the anticipated increase in petroleum prices is projected to be diminished by the government’s efforts to reduced wheat flour prices and by administrative measures.

Gold experts believe that 1 tola gold price in Pakistan will rise in next few days due to high inflation in the country. Since, high inflation forces investors to invest in the safe haven gold.

Final Words

Precious metals like gold provide benefits that are extremely useful especially during political and economic uncertainty. It offers a strong protection against economic recession in countries like Pakistan. The recent rise in the 1 tola gold price in Pakistan have really helped investors to maximize returns on their investment portfolios. Furthermore, it is also a good addition for the wider portfolio diversification plan. However, investors must take prior advice before jumping into a risky arena of the gold investment.