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Why is Gold prices keep on increasing in Pakistan?

  

Here are some potential factors contributing to the recent rise in gold prices in Pakistan:


- Global price increase - Gold prices have surged worldwide driven by economic uncertainty and low interest rates post-pandemic. This global price increase has directly impacted Pakistan's gold rates.


- Weak rupee - The depreciation of the Pakistani rupee against the US dollar has made gold more expensive in rupee terms, as gold is dollar-denominated globally.


- High inflation - Pakistan's high inflation rates have made gold more appealing as an inflation hedge, boosting demand among investors.


- Increased demand - Rising incomes, more disposable savings, and greater appetite for investment has boosted gold demand in Pakistan beyond just jewelry.


- Limited supply - Pakistan's domestic gold production is limited, relying heavily on imported gold to meet demand. Supply chain issues have constrained imports. 


- Geopolitics - Regional geopolitical tensions like relations with India drive up gold's safe haven appeal for Pakistanis.


- Current account deficit - Pakistan's wider current account deficit has put pressure on its foreign reserves, contributing to the weaker rupee and higher import costs.


- Higher custom duties - Pakistan recently increased duties on imported gold further raising domestic gold prices.


So in summary, a confluence of global, domestic, economic, and geopolitical factors have stoked Pakistan's gold prices. Barring a major change, prices are likely to remain elevated.

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