Karachi, October 11, 2023 – The gold rates in Pakistan climbed up by Rs 5,500 on Wednesday due to a surge in the international bullion market.
The price of gold 24 karat per tola increased by Rs 5,500 to Rs 205,000 in the local market. Similarly, the price of gold 24 karat per 10 grams increased by Rs 4,715 to Rs 175,754.
Market sources have attributed the price rise in the local market to the surge in international markets. The gold rate increased by $16 to reach $1,872 per ounce.
Interestingly, the significant appreciation in the Pakistani Rupee (PKR) against the dollar during the past one month has not been seen effectively on gold prices. The local currency has recorded a gain of PKR 27.59 or 9% against the greenback till October 11, 2023 since falling to the lowest level of PKR 307.10 on September 5, 2023.
Factors Driving the Increase in Gold Prices
There are a number of factors driving the increase in gold prices globally, including:
Rising inflation: Inflation is at its highest level in decades in many countries, and investors are turning to gold as a hedge against inflation. Gold is seen as a safe-haven asset that can retain its value during times of economic uncertainty.
Increased demand from central banks: Central banks around the world have been increasing their gold reserves in recent years. This increased demand from central banks is also contributing to the rise in gold prices.
Geopolitical tensions: The ongoing war in Ukraine and other geopolitical tensions are also driving up the demand for gold. Gold is seen as a safe haven asset in times of geopolitical instability.
Impact on the Pakistani Economy
The rise in gold prices is likely to have a mixed impact on the Pakistani economy. On the one hand, it will make it more expensive for consumers to purchase gold. This could lead to a decline in demand for gold in the domestic market.
On the other hand, the rise in gold prices will benefit gold exporters in Pakistan. Pakistan is the fifth largest gold exporter in the world. The higher gold prices will lead to increased export earnings for Pakistan.
What to Expect in the Future
Analysts believe that gold prices are likely to remain elevated in the near term due to the factors mentioned above. However, there is some uncertainty about the long-term outlook for gold prices.
If inflation starts to come down and the geopolitical tensions ease, then gold prices could come under pressure. However, if inflation remains high and the geopolitical tensions continue, then gold prices could continue to rise.
Advice for Investors
Investors who are considering buying gold should do their research and understand the risks involved. Gold is a volatile asset and its price can fluctuate wildly. Investors should only invest in gold what they can afford to lose.
Investors should also consider their investment goals and risk tolerance before investing in gold. If they are looking for a short-term investment, then gold may not be the best option. However, if they are looking for a long-term investment that can help them hedge against inflation and geopolitical risks, then gold may be a good option for them.
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