WHEN GOLD OUTSHINES THE RUPEE: A QUALITATIVE STUDY ON THE DYNAMICS OF GOLD PRICE INFLATION IN PAKISTAN

Abstract

Gold prices in Pakistan have rapidly escalated leading to pressing economic and social issues affecting consumers, investors, and the economic market as a whole. Due to fully domestic and global factors, the prices have escalated giving negative effects to all. Gold has traditionally been considered a safe-haven asset and a cultural icon, creating a further problem as prices have skyrocketed. Previous research has been done on Pakistan's gold market which utilizes macroeconomic studies and quantitative data, but there has been a lack of research considering the lived experiences and perceptions of the market. The objective of the study is to understand the phenomena of gold price escalation in Pakistan, while utilizing an exploratory, qualitative research design. The researcher utilizes a diverse set of participants including, but not limited to, gold investors, economists, traders, bankers, and consumers, in which data collection is completed through semi-structured interviews and focuses group discussions. The researcher provides a thematic analysis to describe and identify the qualitative data. The participants of the study identified a total of eight themes to be the most impactful; these factors included the macroeconomic conditions, as well as gold as a safe-haven asset, political and institutional inconsistency, cross market influences, social and cultural influences, market and supply limitations, behavioral and psychological influences, as well as social and economic disparity. The increase in the price of gold can be attributed to a number of different reasoned strategies and culturally driven practices. This drive for price inflation can be attributed to a rational, cultural, or irrational behavioral response to the factors influencing the economy. The study helps the investor, policymakers, and the financial institution understand and cope with the uncertainty and various frictions of the economy. This research, from a qualitative standpoint, offers the most comprehensive account of the behavior of the gold market in Pakistan.