Financial Markets Feel the Brunt as Investors Sell
As financial markets are unpredictable, investors are selling investments off at higher values. Gold prices fell Rs. 6,200 per tola in a week in Pakistan.
Many precious metals shed their values on Monday in US, including Platinum and Gold. Investors are beginning to fear that a global recession is coming, and are liquidating any hard asset that they can find to cover their margin calls.
Stocks’ values fell lower as the US Federal Reserves slashed the interest rates to 0% – 0.25% to encourage bond buying in the economy. US is not the only economy to bear the brunt of COVID-19, as Europe markets have turned bearish.
Precious Metals’ prices fell in the international market as follows:
- Platinum – 26%
- Palladium – 12%
- Silver – 14%
- Gold – 3%
What is happening in Pakistan?
Within one week, the price of gold fell around Rs. 6,200 per tola. As the markets are unpredictable, investors are reaping their investments and selling them off at attractive values. Even PSX has been facing market halts due to COVID-19 and Oil Price War.
What measures are being taken Worldwide?
As previously mentioned, the US Federal Reserves have slashed their rates to around 0%. New Zealand also cut their rates to record law, while Australia has been injecting liquidity into a financially strained market. Philippines went a step further and decided to close their financial markets indefinitely.
China also took a similar step to Australia and injected $93 billion into the financial market by offering medium-term loans to banks and cutting the amount of cash lenders must hold in reserve. However, they did not slash their interest rates like the US.
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