The Pakistan Economy Watch (PEW) on Wednesday expressed concern over receding gold and silver prices, terming it a sign of shrinking economic activity on the global scale. Contracting economic activity is because of incoherent policies of western banks causing falling demand, it said.
The sharpest decline in gold prices in 30 years is a turning point on the global economic map since the financial crisis in 2008 after which investors lost interest in paper money and shifted towards gold, said PEW President Dr Murtaza Mughal.
He said gold tripled in value in the last three years before a recent downturn which was amazing since no government can print gold like their currencies. Western central banks have been pumping trillions of dollars into the system to overcome the crisis but most of the money is being used for speculation which should have been used to finance projects to stimulate demand, he observed. Dr Mughal said sliding gold prices is seen by some as the failure of global capitalist economy which can now only be sustained by China and other emerging markets. Many western economies are performing lower than expected and hitting lives of people which resulted in reduced demand; while many investors are offloading the precious metal resulting in a sharp fall in the prices, he noted.
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