GOLD RUSH IN PAKISTAN: UNDERSTANDING THE FACTORS AFFECTING THE PRICE OF GOLD
The price of gold in Pakistan fluctuates based on a variety of factors, including global demand, supply and economic conditions. Currently, the price of gold in Pakistan is influenced by a number of factors including the US dollar exchange rate, inflation, and the overall performance of the global gold market.
US DOLLAR EXCHANGE
The rate at which the US dollar is exchanged for gold is one of the main factors that influence its price in Pakistan. The price of gold in Pakistan typically rises in tandem with the weakening of the Pakistani rupee against the US dollar. The primary reason for Pakistan's high gold prices is the Pakistani rupee's current depreciation.
Another major factor that affects the price of gold in Pakistan is inflation. As inflation increases, the prices of goods and services tend to go up, including the price of gold. The current inflation rate in Pakistan is also a contributing factor to the high prices of gold.
GLOBAL GOLD MARKET
The price of gold in Pakistan is also influenced by the overall performance of the global gold market. The price of gold typically rises in response to a strong global demand for the metal. On the other hand, gold's price tends to go down if there isn't much demand for it around the world.
The government's tariffs and taxes have an impact on Pakistan's gold prices as well. Gold is subject to a variety of taxes imposed by Pakistan's government, including income tax, sales tax, and others. The price of gold for the general public goes up as a result of these taxes.
It's important to note that gold is considered as a safe haven investment and its prices generally increase during times of uncertainty and economic downturns. The current global economic uncertainty caused by the COVID-19 pandemic has led to an increase in the demand for gold, which in turn has led to an increase in gold prices in Pakistan.