Gold prices in Pakistan have been on the rise for some time now and many wonder why this is the case. There are a few factors at play here that are contributing to this upward trend in gold prices:
Economic uncertainty
persistent inflation, weakening currency, and other economic struggles have caused investors to search for alternative investments that can provide stability through turbulent times. Physical gold has historically proven to be a viable asset class when it comes to preserving wealth in times of uncertainty since its value often holds up better than paper currencies or other assets that may be more affected by external conditions.
Speculative buying
investor speculation over the course of the pandemic led many to purchase physical gold as a hedge against their other investments that may not have been doing so well at the time. Buying gold as an insurance policy during periods of heightened volatility helps protect an individual’s portfolio from large losses due to market fluctuations.
Increased demand from jewelry buyers
Because gold is considered an essential item in most societies, there is always going to be steady demand from those seeking jewelry items or coins made of gold as gifts or decorative pieces. The increased demand pushed up prices during certain periods, such as Eid al-Adha when people like to make purchases associated with their cultural celebrations.
Money printing
Quantitative easing policies typically resorted to by central banks print more money, decreasing the value of already existing currencies while increasing demand for tangible assets like gold which help counterbalance inflationary pressures resulting from too much money being printed into existence relative to what’s available in terms of goods/services being produced..
Low interest rate environment
Low interest rates tend to lead investors to look for other avenues of generating returns given how much their savings are losing out in terms of real value due primarily to rising inflation rates caused by excessive money printing policies implemented by governments around the world..
Global political tensions
Geopolitical instability and trade disputes between various countries can often cause unease within the financial markets leading investors towards safe-havens like physical gold given its history of maintaining value during tumultuous times even when other assets take big hits due lack of security amidst uncertain circumstances