Will Rupee Devalue Further? Economic roller coaster

[syeddanishanwar]

You should buy gold and dollar for hedging your long term savings.

I believe gold will go to over $2500 ounce in the next five years. So, it is save to invest right now. Don't buy it when the gold value is above $1850-$1900 as it is the historical peak value. Also, gold value normally reaches peak between November to March due to the high demand during the Indian wedding and Chinese new year season. You should not buy gold during this period. I've noticed that April to September are the best months to buy the shiny yellow metal.

[HellsGuardian]

Thanks for sharing these tips!

[mgalaxy3]

ARY Millat and Swiss bars are the best

hey bro I checked with them and ARY is not providing purchase receipts at all for the bars.. Did you get a receipt for your purchases?
sadly most of my savings are also in rupee and took a hit.

Also, do banks allow u to deposit foreign currecny purchased from local market?

Do they give any trouble or fbr for unnecessary audits ?

[OgRe1985]

You have to be a filer for opening a foreign currency account. Either you keep money in PKR or foreign currency account FBR has the record of your accounts declared in your tax returns.if you are not a filer you cannot open a foreign currency account.

[mgalaxy3]

You have to be a filer for opening a foreign currency account. Either you keep money in PKR or foreign currency account FBR has the record of your accounts declared in your tax returns.if you are not a filer you cannot open a foreign currency account.

being a filer is fine, that i am. but wondering if they bother you intentionally if you open an account .

[bored]

Also, do banks allow u to deposit foreign currecny purchased from local market?

Yes, as long as it's new design dollar notes.

Do they give any trouble or fbr for unnecessary audits ?

Not at all.

[bored]

Why would they bother you?

Banks aren't do anything to their customers, unless FBR/NAB needs to launch the inquiry against any customer, only required data/information will provide to respective departments on through proper channel documented request.

[OgRe1985]

No they will not create any problem or anything. If you decide to purchase dollar from market make sure you buy a brand new note without any stamp,line or even any pin hole, and face should not be faded also otherwise bank will not accept those notes.

[OgRe1985]

Most bank will open bank account by depositing 1000 US dollars(HBL) or some even 500(UBL).

[HellsGuardian]

I think ARY can provide receipts if you tell them you are willing to pay the tax.

As far as i know, salaried people are exempt from tax audits.

[khurem]

You made a lot of profit on gold based on a 1 off event i.e. Covid. Gold appreciated a lot and is still maintaining a relatively high level as Covid hasn't gone yet. But gold won't keep on giving you that kind of return on consistent basis, unless we have recessionary global economy for a long time or another pandemic coming to hit us. On the contrary if world economy improves and Covid subsides, we can very well see gold giving negative returns from current levels.

Best time to buy gold isn't when it's trending at a lower price, as no one really knows what a 'low' price of gold really is. Is it relative to the highs it made at peak of lockdowns last year, is it relative to the price levels before covid, or is it relative to the potential price of $2500+ that gold enthusiasts were predicting to hit anytime last year. Best time to buy and hold gold is simply when you expect economies to contract or a negative global event (such as a war or climate catastrophe on a large level) that would result in stock market crash where everyone would rush towards safe haven like Gold.

A simple tip would be, if you expect global economy to improve: Invest in stocks
If you expect global economy to contract: Invest in gold
if you expect economy to remain at current levels or are unsure which way it will go: Stocks, as it always outperform gold, in stable markets.

Having said that, for Pakistanis, gold is a bit more valuable than it is globally as it gives us returns due to increase in USD value when PKR depreciates, even when gold price in dollars itself isn't moving.

[Nabs]

I bought bars from ARY in Siddique Trade Center in 2017 at 52,000 rs per tola. They charged 800 rs charges per bar at that time, there was no sales tax and I was provided a proper stamped receipt. They said they will only buy back gold if I have the original receipt, or I will have to sell them in market.

How much is tax on gold bars? This article says that 1 percent tax is imposed on gold bars "unworked gold". If its 1 percent, than I think it isn't much, you can pay it and get the original receipt. Total charges with tax will be around 2,000 per tola bar for buying. It isn't much if you are buying long term.

I don't see gold as an investment, I don't even check its price anymore. Its my liquid asset that does not depreciate with currency. Its peace of mind.

[mgalaxy3]

think ARY can provide receipts if you tell them you are willing to pay the tax.

How much is tax on gold bars? This article says that 1 percent

Are you sure it's 1 percent tax max on gold bars?

[Nabs]

Are you sure it's 1 percent tax max on gold bars?

Not sure, that's what the news article says. Its best to ask directly from jeweler.

[Nabs]

btw PMEX is not a real futures exchange, its all CFD. For example you can trade 10 and 100 barrels of oil at PMEX. Real futures crude contract is 1,000 barrels only.

[HellsGuardian]

Thank you all for sharing valuable experiences.

[syeddanishanwar]

hey bro I checked with them and ARY is not providing purchase receipts at all for the bars.. Did you get a receipt for your purchases?
sadly most of my savings are also in rupee and took a hit.

Also, do banks allow u to deposit foreign currecny purchased from local market?

Do they give any trouble or fbr for unnecessary audits ?

I don't buy from ARY directly. So, I don't know whether they provide a receipt. The local gold dealer in my area provides his own receipt.

Secondly, almost all banks allow you to deposit foreign currency.

In Pakistan, there is no wealth tax. I think it was abolished when Shauket Aziz was PM during General Pervez Musharraf era. Bank deposits including foreign currencies are your personal assets so any appreciation in value is not taxed.

[syeddanishanwar]

If you decide to purchase dollar from market make sure you buy a brand new note without any stamp,line or even any pin hole, and face should not be faded also otherwise bank will not accept those notes.

Good advice. Also, keep an eye on new currency design. The FED (US) had issued new currency notes with improved security in 2003 and 2004. It may do so again in the future.

You should sell your currency reserves at once (and preferably buy gold) when the central bank announces new currency note design.

One of my relatives asked me to sell an old foreign currency note. The dealer had accepted it at half the current rate since it was out of circulation.

[syeddanishanwar]

s it relative to the highs it made at peak of lockdowns last year, is it relative to the price levels before covid, or is it relative to the potential price of $2500+ that gold enthusiasts were predicting to hit anytime last year. Best time to buy and hold gold is simply when you expect economies to contract or a negative global event (such as a war or climate catastrophe on a large level

As I had said, Gold is a long term hedge against inflation and currency devaluation. It is not an investment option. The value of gold in inversely related to stock market returns.

Historical or time series analysis will allow you to know the support and resistance levels, which in layman's term means low and peak values.

Expert predict gold value could even go past $2500 in the next 18 months. There is nothing known for certain. But financial experts carry out fundamental and technical analysis that can help in predicting future values to a high degree of accuracy.

Council Post: What's Driving Gold Prices So High, And What Might The Future Hold?

Even if gold values remain the same, dollar value will appreciate in comparison to pak rupees so either way you make a profit. As long as PTI remains in government, toilet paper will be worth more than pak rupees. It may make bold promises regarding progress and ending corruption, but the fact is that we have seen record currency devaluation and economic losses during this akhroti government.

Stocks and other investment options have high risk and high return. Personally, I don't invest in stocks due to high variance that makes it similar to gambling. You either make a lot of money or loose all of your investment within minutes due to a dip in the market.

Gold is an entirely different instrument. There is almost zero risk that you can lose all your investment in gold - unless, of course, your masi steals all the gold in the almari. You can consider it an alternate currency similar to greenback that can help you avoid losses in the long term due to inflation and devaluation.

Note, the above advise is true only for people in Pakistan faced with high inflation and currency devaluation scenario. It is not relevant for people living abroad where the market dynamics are different.

[Nabs]

Food import bill up 22pc in fiscal year’s first month ~ DAWN

Primary balance clocks in at -1.4pc in FY21 ~ DAWN
This has been the first time Pakistan reported a fiscal deficit of more than 7pc of GDP for three years in a row since 1987-88 (i.e. in 33 years). To bridge the budgetary gap of Rs3.4tr, the federal government used a mix of external and domestic financing.