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Top 5 factors affecting the gold prices in pakistan

Gold bullion vs Gold StockGold prices in Pakistan are experiencing a quite spike in last few months. Currently  the price of one tola gold is 49000 PKR and the price of 10 grams of gold is 42000 PKR. The prices have been up by almost 16% since the beginning of the year.



Gold Prices in Pakistan are affected by several factors such as inflation, the value of the US dollar, production of gold and the consumer’s demand. These factors play an important role in the rise and fall of the gold prices in USA and Pakistan. Let us have a look of some of the main factors that we just mentioned.

Production of Gold

Though Pakistan is not a major producer of gold but it has a few gold mines that have substantial production potential. If the production of gold increases in the country, it definitely affects the gold prices in Pakistan.  Major areas of production of gold in Pakistan are in Baluchistan and Kashmir. The production of gold in other countries also affects the gold prices in Pakistan.

The value of Dollar

 The value of dollar and gold prices has an inverse relationship. Increase in the value of the dollar decreases the gold prices in USA and other advanced countries like EU nations. This increase in the value of dollar and decrease in gold prices in USA also affects the gold prices in Pakistan.

The Consumer’s Demand for Gold

The consumers demand in the country is a major reason for increase in Pakistani gold prices. Since the metal is used in the jewelry, so its prices are highly dependent on the demand of the consumers in the local market. The higher the demand the higher are the prices. The prices go low with the decrease in the demand for gold in the local markets. Major markets in Pakistan are in Karachi and Lahore.

Gold Prices in the International Market:

Pakistan is not a self-sufficient country. It imports goods from the international market as per the need of the consumers. This is one reason that the gold prices in Pakistan are directly affected by the gold prices in the international market. The international prices of the gold have increased from $ 1050 per ounce to $ 1264 per ounce in less than four months of this year.


Last but not the least is inflation, it has a direct effect on the gold prices in Pakistan. An high inflation rate will force the investors to make their investments in the banks.This will help them to earn more profits as compared to investing in gold.The low interest rates forces short term and long term investors to invest in alternative and safe haven investment options like Gold.This type of situation puts pressure on the gold prices in Pakistan and as a result they rise.

Gold prices in Pakistan depend on several factors, the most important of which have been discussed in the article. These factors are directly influence the investing strategies used by the gold investors of Pakistan. Investors can easily devise their future investing strategy by properly studying and analyzing these factors in detail.



About Emaad Qureshi