Gold gave a ravishing 897% returns over the last ten years from Rs 6280 per tola in 2002 to Rs 62600 per tola in 2012. It has outperformed most investments like stocks, bonds, currencies in the past ten years and grew by 21.8% while KSE index rose by 21.35% on an annual compounded basis. The overall performance of Gold as depicted by the graph seems to be consistent with an upward trend. Accordingly, Gold seems to remain one of the key components of a balanced portfolio. Pakistan is currently going through turmoil of political and socio-economic instability and in times like this. Gold is believed to be a tool for diversification and a hedge against losses made by other investments. Safdar Ahmed, an agriculturist agrees, "I try to have at least 20% of my net worth in Gold:' Gold also has the ability to provide more liquidity compared to other asset classes like real estate and stocks, especially in times of crisis. On this note Saad Rafi, AKD Securities advises, "Gold is also an excellent store of wealth and owning at least some percentage of gold provides investors with the hedge that is needed:'
In recent times, investing in bullion requires huge capital. The Government recognised this dilemma and established a regulated exchange which offers online trading of Gold.
Gold's increasing performance over the years is a result of increasing demand, falling supply and safe haven influence. Junaid Zakaria elaborated "I believe the value of gold hardly decreases over time. It may undergo some correction in price, but overtime, the value rises:'
Pakistan Mercantile Exchange (the first demutualized exchange) is offering physical gold for trading/investing purposes. This is the most authentic form of Gold available in the market "Gold has an intrinsic value which will never make it worthless' says Kashif Rail, First Arif Habib Investment.
'Gold will give all kinds of investors a brilliant hedge against currency depreciation, which is why it is good idea to back your funds with Gold:' Rupee has declined by almost 40% in the last 10 years, and this gives Gold an extra push as Gold is denominated in Dollar.