Given the existing geopolitical tensions, economic instability, and elevated inflation levels, numerous individuals are apprehensive about their financial situations. For those seeking a secure investment option, gold bullion, a traditionally recognized safe-haven asset, may offer a potential solution. If you are worried about the potential impact of upcoming economic or geopolitical challenges on your wealth, consider the advantages of investing in gold in 2024.

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. 218,200 and ended the week at Rs 212,744.

1.   Federal Reserve Will Play Its Role

Gold prices are going through a very good time as it is showing an upward trajectory, affected by a small amount of dollar decline. Gold investors are currently adopting a careful approach as important economic indicators report going to release in the current week. Here, experts are expecting high interest rates in future but still ascent in gold prices would remain moderate.

Experts believe that market observers were more engrossed on collecting more insights about the American economy, with decreasing anticipations that the Federal Reserve would initiate interest rate decreases as early as March 2024. This sentiment had previously exerted significant downward pressure on gold prices in January, causing them to drop to $2,000 per ounce.

Nevertheless, gold prices succeeded to recover from its lowest point in 2024 due to mounting geopolitical pressures in the Middle East. These geo political tensions increased demand for safe-haven precious metals. Furthermore, hopefulness related to the possible future monetary policy modifications by the Federal Reserve added to supporting gold prices.

The described economic conditions are expected to calm US gold prices and could eventually lead to an upswing in the 1 tola gold price in Pakistan. Hence, it appears to be an opportune moment for investors to consider allocating their funds in the bullion market.

2.   PKR Appreciation will Affect 1 tola gold price in Pakistan

The Pakistani rupee got considerable gains against the US Dollar in the current week. The currency started the week while trading at 279. During the first intraday trading period, it displayed overall stability against the greenback, undergoing minimal fluctuations. It briefly touched 280 this week but quickly reverted to 279. Subsequently, the interbank rate maintained this level for the rest of the day. Open market rates remained steady within the 279-280 range across various currency counters throughout the day.

Gold experts believe that this currency appreciation is good for the bullion market and will decrease the 1 tola gold price in Pakistan.

3.      Pakistani Economy is Improving

Pakistan has effectively avoided an imminent debt default, overpowering challenges created by mounting inflation and an increasing budget deficit. Pakistani governments has recently implemented economic measures such as governmental fiscal reforms and cost-cutting actions, played an essential role in navigating the economy back towards steadiness.

Upcoming Pakistani elections give a hope to investors about the economic recovery as it will help to bring some kind of stability in the country. The top political parties are quite sure that they have to take IMF help after coming to power in next few months. However, they have to ensure fiscal discipline and policy uniformity. This tactic is also projected to strengthen Pakistan’s foreign exchange reserves, thus improving its solvency.

The recent World Bank report  “Global Economic Prospects – January 2024,” forecasted Pakistan’s economic growth at 1.7% for the present fiscal year 2023-24 and a heartening 2.4% in FY 2024-25.It shows that a notable recovery from the -0.2% contraction in the previous fiscal year. Analysts highlight two external factors that could impact Pakistan’s economic performance in 2024.

The positive trend observed in 2023 includes a significant 34.29% reduction in the trade deficit during the first half of the fiscal year starting from July 2023 compared to the corresponding period in the previous fiscal year. Notably, Pakistan’s exports to China surged by 66.4% from July to December 2023, reaching $1.546 billion.

According to analysts, it is the best moment for gold bullion investors to capitalize on the current conditions and invest in gold. This is because it’s a period when the demand for safe-haven assets is rising, leading to an increase in the value of precious metals and potentially impacting the price of 1 tola gold in Pakistan positively.

4.   High Inflation Will Increase Gold Value

The recent country report from the IMF, released on January 19, recognized the positive strides in Pakistan’s fiscal performance, highlighting the attainment of a primary surplus by the general government in the first quarter of FY24. Despite these advancements, the report underscores the enduring challenges and notably elevated downside risks.

Although there is an overall improvement in macroeconomic conditions, the concern of inflation persists. The IMF proposes that through the implementation of appropriately stringent policies, there is a potential for inflation to decrease to 18.5 percent by the conclusion of June 2024.

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.

Final Words

There are multiple avenues for investing in gold. One option is to invest in physical gold, which involves purchasing gold coins, gold bullion, or gold jewelry. Alternatively, you can explore investments in stocks and exchange-traded funds (ETFs) that are focused on gold.

For those interested in entering the realm of gold investments in Pakistan but unsure where to begin, brokerage firms registered by PMEX can help them to identify best investment options in the gold market

Therefore, it is extremely important to take advice from a registered brokerage house in Pakistan .The expert hired by these companies will offer you thoughtful and well-informed suggestions for your long-term investment strategy

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 appears to be a viable option.