MACRO REPORT Gold.docx - REPORT SUBJECT MACRO ECONOMICS...

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REPORT SUBJECT:MACRO ECONOMICS. TOPIC:AGGREGATE DEMAND AND AGGREGATE SUPPLY FOR GOLD IN PAKISTAN.GROUP MEMBERS:1.Muhammad Ahmed Butt (44323)2.Muhammad Arbaz Khan (44060)3.Mustaqfi Dada (….)4.Shahreyar Raees (….)SUBMITTED TO:Dr. Amena.
Early aggregate demand and supply of a good in the country means gold in 2018 and 2019 with statistics:With the recent spike in prices, gold demand in Pakistan has moderated according to a report by the World Gold Council (WGC), the global body that monitors the gold market. Some merchants express doubts about the finding but sadly no one in Pakistan seems to be in a position to endorse or contest the report owing to lack of local data. The rupee depreciation of around 26 per cent against dollar this year hascontributed to the rising domestic price of gold and made price sensitive buyers reluctant, suppressing demand by about 11pc.Normally in times of economic uncertainty, when the market is volatile and risk perception high in capital, currency and property markets, demand for gold is a safe option for saving as capital rises. The stiffer rules of disclosures in the formal sectors ought to make investment in cash-based gold a more viable option for Pakistanis who prefer to deal under the radar.The gold rate hit an all time high at Rs 68,000 per tola (11.6 grams) last week in the domestic market, perceived to have pushed middle-class buyers to the sidelines. No government agency, at any tier, monitors or regulates the market. In the absence of government oversight, the gold market operates under the influence of key players besides the forces of demand and supply. Market operators insist that the upward price movement has not dissuaded investors who prefer to operate under the radar, particularly when they wish to move capital around. According to market sources investors command about 40pc of total gold trade in the domestic market. In absence of government oversight the gold market in the country operates under the influence of key players besides market forces of demand and supply.In its latest publication the council has recorded an 11pc fall in gold demand in Pakistan in the third quarter of 2018. In 2017 gold demand increased by 7pc in Pakistan. According to the same source the fall in the demand for jewellery and gold bars in Pakistan is more than proportional: jewellery demand shrunk by 11pc and bullion by 13pc.
A search for a domestic source that collects data of sale-purchase, total stock and changes in volume available locally proved futile. No government agency, at any tier, monitors or regulates the market. The Ministry of Commerce monitors importsand exports but the numbers are not reflective of the actual scale of gold trade in Pakistan that everyone agrees is huge.

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