Gold which is associated with haven has given a remarkably volatile movement in terms of prices in Pakistan in the last few days. By writing the price of gold depends on the global market forces, domestic macroeconomic factors, and geopolitical issues for which the prices have been quite volatile for both the investors and the users.
Recent Trends in Gold Prices
This has been evidenced over the past week where the price of gold has been very much volatile in the Pakistan market. This move was a slight upside from earlier during the week whereby a tola of gold was being sold at PKR 205,000 on November 22, 2024.
Gold prices, for instance, rose by at least PKR 10,000 per tola in two days because of volatility in the global markets. Currently, in the global gold market, the price is increasing due to inflation and unstable economic conditions, forcing investors to seek safer products such as gold.
Factors Affecting Gold Price Movements
Several factors have contributed to the recent fluctuations in gold prices in Pakistan:
- International Market Impact: Gold prices globally have been restrained by declines in the value of the U.S. dollar and by high interest rates. If the dollar rises, gold declines but if the dollar declines or becomes flattish, gold moves up as has been witnessed lately.
- Inflation and Economic Uncertainty: Other factors that make gold quite popular are current economic problems like high levels of inflation and devaluation of the rupee in Pakistan. Bullion holders normally treat gold with an anti-inflation hedge and this aspect has been revealed by the rising prices in the recent past.
- Exchange Rate Fluctuations: Prices of gold are also affected by the exchange rate of the Pakistan rupee to foreign currency most especially the US dollar. A declining rupee tends to push up the cost of gold in domestic markets because gold is priced in the international market at the dollar.
- Geopolitical Factors: Another factor that affects the price of gold is the global geopolitical environment. Burgess(2011) states that in summary, political uncertainties in major centers, economic boycotts, or political instabilities compel investors to invest in gold, and, consequently, raise the price of gold.
Price Comparison: The Week in Review
To provide a clearer picture of the volatility in gold prices, here’s a day-by-day comparison of prices over the past few days:
- November 24, 2024: This compelled investors to set a new record the price of gold per tola hit PKR 215,000.
- November 22, 2024: Brent was at $68 per barrel while the gold price was PKR 205,000 per ton.
- November 21, 2024: Gold had fallen to PKR 198,000 per tola.
- November 20, 2024: In the unit price site, gold was forecast at PKR 202,500 per tola.
- November 19, 2024: It was equal to PKR 200,000 per tola was charged.
From the two rates contrasted above, it can be noted that the price of gold has a variation as wider as PKR 15,000 per tola span within a short duration; therefore, not stabilized. Such oscillations have raised concerns, especially for anyone who wants to preserve their wealth through investment or for anyone who is in dire need of purchasing gold for cultural occasions such as weddings.
What Lies Ahead for Gold Prices?
During the given period, there has been an overall volatility of gold prices in Pakistan and the direction of gold prices in Pakistan remains uncertain. One measurable criterion is the state of Affairs in the global economy regarding inflation rates and monetary policy decisions of central banks in large countries, including the USA and countries of the European Union. Fluctuations in interest rates or currency could therefore offer additional momentum and force new shifts in global and local gold prices.
Similarly, for the people in Pakistan, an awareness of these trends and their manifestations in the local context can be useful when it comes to investing and engaging in the consumption of gold.
