Gold prices in Pakistan saw an increase on Friday, with the price per gram rising to 20,814.31 Pakistani Rupees (PKR) compared to the previous day’s rate of PKR 20,757.19. The price per tola also increased to PKR 242,771.90 from PKR 242,107.80 the day before. FXStreet uses international prices converted to local currency and measurement units to calculate Gold prices in Pakistan, which are updated daily based on market rates at the time of publication.
The global market for Gold has been influenced by various factors, including the Federal Reserve’s projection of only one rate cut in 2024 compared to three cuts estimated in March, which has favored the US Dollar over Gold. Softer inflation figures this week suggest that the Fed may lower borrowing costs earlier than expected, with a greater chance of the first rate cut in September according to CME Group’s FedWatch Tool. Recent data also showed that Producer Price Index (PPI) for final demand rose by 2.2% on a yearly basis in May, lower than previous expectations.
Gold has historically been considered a safe-haven asset and a hedge against inflation and depreciating currencies. Central banks are major holders of Gold, using it to support their currencies in turbulent times and improve the perceived strength of their economies. In 2022, central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves, the highest yearly purchase on record. Countries like China, India, and Turkey are rapidly increasing their Gold reserves to build trust in their solvency.
Gold’s price movement is influenced by its inverse correlation with the US Dollar, US Treasuries, and risk assets. When these assets depreciate, Gold tends to rise as investors and central banks diversify their holdings. Geopolitical instability and economic fears can also drive Gold prices up due to its safe-haven status. Additionally, lower interest rates generally lead to a rise in Gold prices, while a stronger Dollar tends to keep Gold prices in check.
Overall, Gold remains a valuable investment tool widely seen as a safe asset during turbulent times. Its historical significance, central bank holdings, and market dynamics make it an essential component of any diversified investment portfolio. The current global market conditions will continue to influence Gold prices, with investors closely monitoring economic indicators and geopolitical events for potential price movements. As a standard measure of value and a safe-haven asset, Gold’s role in the financial markets is expected to remain significant in the foreseeable future.
