International Geo-Political Situations and Gold Prices

Pakistani investors consider gold an extremely reliable investment option as they see its value rising even during recessionary periods. In addition to that, it acts as a safe haven asset when there is political uncertainty. Therefore, we can say that it can be an awesome option for investors during current difficult business conditions in Pakistan and offers very good prospect for everyone to earn millions in profits in upcoming 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.

Last Week Gold Market Performance

The 1 tola gold price in Pakistan (24K) started the week at Rs. 226900 and ended the week at Rs 228200.

1.   Geo-Political Unest and  1 tola gold price in Pakistan

Investors, especially those with substantial holdings in gold, silver, and mining stocks, need to exercise more patience. Indian market premiums have shifted to a discount, and savvy COMEX traders often take cues from this market. With India’s gold enthusiasts benefiting the most from the rally due to their significant gold reserves, their purchasing is likely to pause until a significant pullback occurs. However, the rally against the depreciating US dollar is expected to continue, with no major sell-off expected until summer.

Netanyahu’s leadership style has been compared by some analysts to that of “Patton on Crack,” suggesting a penchant for aggressive tactics and a high tolerance for collateral damage. There’s a perception that he revels in the chaos and may even seek to escalate tensions further. The increasing friction between the US and Israeli governments is expected to persist, potentially driving up gold prices by around $100/oz due to geopolitical and political uncertainty.

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.   Appreciating Rupee will Affect 1 tola gold price in Pakistan

The Pakistani rupee has improved from its past week level and experts are expecting might show further improvement due to the recent IMF bailout loan package approval.

The current financial year was quite encouraging for the PKR as market observed 7.6 rupees or 2.73% appreciation against the US dollar. However, the PKR’s performance against other important currencies was not too good.

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 bullion market as Pakistani rupee will certainly depreciate due to imports pressure in the upcoming week.

3.         Uncertain Political Situation will Affect 1 Tola Gold price in Pakistan

Pakistan’s economy has faced significant challenges due to political instability in recent times. The regular government changes and the lack of reliable policy agendas have shaped an unreliable business environment. Consequently, both local and international businesspersons and entrepreneurs have been cautious while investing in the country, causing potential investments and job opportunities losses, further worsening the economic situation.

Moreover, the current political uncertainty has damaged confidence in the government’s capability to handle the economy efficiently. This lack of trust has decreased consumer and investor confidence, hampering economic growth. Without stability and a clear direction, businesses find it difficult to plan for the future and make long-term investments, thereby impeding overall economic progress.

This is a perfect time for the gold investors as they can easily take benefit from this scenario to increase their investments in gold during high inflation and economic uncertainty.

4.   High Inflation Will Increase 1 Tola Gold Price in Pakistan

Headline inflation will touch  20.4% mark in current month from 23.1% last month. The decrease mainly influenced by the high base effect. On the other hand, Consumer Price Index (CPI) will increase by 1.47% on monthly basis and mainly upsurges in the food prices such as fruits, and vegetables drive this index .

However, it’s important to note that the expected application of a 18% Goods and Services Tax (GST) on Petroleum products and items will certainly shift inflation rate upwards and might alter assumptions regarding the projections of a rate cut.

Trade experts believe that 1 tola gold price in Pakistan will increase in next few days due to high inflation in the country. Since, high inflation makes people to invest in the safe haven bullion market.

Final Words

Gold offers unique advantages and benefits especially during political and economic uncertainty. Pakistani investors must also understand that it can be a stable asset and a safeguard against inflation in current tough economic conditions. Moreover, it is the best time to invest due to rising 1 tola gold price in Pakistan .In addition to that, it is also a good addition for the broader portfolio diversification plan. However, it is essential to recognize that there isn’t a universally optimal investment approach, and seeking expert advice is prudent when navigating substantial investment choices.