How Rising Gold Prices Are Affecting Smartphone Prices in Pakistan

The gold price in Pakistan has reached record highs again, creating a ripple effect across almost every industry — from jewelry to electronics. While most people associate rising gold prices with the jewelry market, the truth is that it also influences the prices of other imported goods, especially smartphones.

According to the latest update on Gold Rate in Pakistan, the 1 tola gold rate is Rs. 430,500 on 10 Oct, 2025. This continuous surge in gold prices reflects the ongoing economic instability and rising inflation in the country. But how exactly does a rise in gold prices affect smartphone prices? Let’s understand this connection step by step.

1. Gold Prices Reflect the Overall Economic Health

Gold is often seen as a “mirror” of a country’s economy. When gold prices rise, it’s usually because the local currency is weakening or inflation is increasing. In Pakistan, when the rupee loses value against the dollar, the cost of importing goods — including smartphones — goes up.

As a result, even if a mobile phone’s global price remains the same, its price in Pakistan increases because of the rupee’s depreciation. So, the same iPhone that costs $1000 abroad might cost much more locally because importers have to pay extra in rupees due to currency fluctuations.

In short, rising gold prices = falling rupee = higher smartphone prices.

2. Global Inflation and Import Costs

When gold becomes expensive globally, it’s a clear signal that investors are seeking safe assets amid economic uncertainty. This happens during global inflation, wars, or recessions — and all these factors raise the cost of living worldwide.

Pakistan heavily relies on imports, especially for mobile phones and electronic components. Brands like Samsung, Infinix, Vivo, and Apple import devices in US dollars. When the dollar strengthens and the rupee weakens (as reflected in high gold prices), importers and retailers are forced to increase prices to cover costs.

That’s why every time the gold rate rises, smartphone prices soon follow. It’s not a coincidence — it’s an economic chain reaction.

3. Manufacturing and Supply Chain Disruptions

Rising gold prices also indicate global financial instability, which affects shipping, manufacturing, and supply chains. For instance, when global metal prices rise — including gold, silver, and copper — it increases the cost of electronic components like microchips, batteries, and circuits.

Although gold isn’t a major component in smartphones, small amounts of it are used in internal connectors and processors because it’s an excellent conductor. So when gold prices rise, manufacturing costs for phones also increase slightly.

Even a minor increase in production cost can push retail prices up, especially in developing countries where import duties and taxes are already high.

4. Taxes, Import Duties, and Government Policies

In Pakistan, the government often imposes or adjusts taxes on imported items to stabilize the trade deficit. These changes directly affect smartphone prices.

When gold prices rise and the country’s dollar reserves shrink, the government may tighten import policies to control the outflow of foreign currency. This leads to:

• Higher customs duties on imported goods
• Restrictions on luxury item imports (like premium smartphones)
• Increase in sales tax and withholding tax

All these factors make mobile phones more expensive for end consumers. The rise in gold prices is, therefore, not just a jewelry market concern — it’s a sign of wider financial tightening across the economy.

5. Shrinking Purchasing Power of Consumers

The rise in gold prices is also tied to a decline in people’s purchasing power. As inflation rises, essentials like food, fuel, and electricity become more expensive, leaving less disposable income for luxury or non-essential items like new mobile phones.

This reduced purchasing power impacts the smartphone market in two ways:

1. Low-end and mid-range phones see more demand, as people avoid buying expensive flagships.
2. Retailers raise prices slightly to maintain profits due to fewer sales volumes.

So, while gold investors may see higher returns, the average consumer finds it difficult to afford new devices.

In short, gold’s gain often signals a loss in consumer spending.

6. Impact on Local Smartphone Assembly in Pakistan

Pakistan recently started assembling smartphones locally under the “Make in Pakistan” initiative. However, most parts are still imported. When the gold rate and dollar prices rise, the cost of imported materials increases, making it harder for local manufacturers to maintain low prices.

High production costs mean either:

• Lower profit margins for manufacturers, or
• Higher prices for consumers.

So even locally assembled smartphones are indirectly affected by global gold and currency trends.

7. The Psychological Effect on the Market

Rising gold prices also have a psychological impact. When people see headlines like “Gold hits record high,” they automatically perceive that everything is becoming expensive. This mindset drives panic buying or cautious spending — both of which affect smartphone sales.

Retailers often anticipate higher costs and increase prices early to stay ahead of inflation. That’s why mobile prices sometimes rise before new import costs are officially applied.

8. What Can Consumers Do?

While individuals cannot control gold prices or currency rates, there are smart ways to plan purchases:

• Track daily gold and dollar rates before buying expensive devices.
• Purchase phones during sales or clearance events instead of peak inflation months.
• Compare local and international prices to find value deals.
• Use installment plans or trade-in offers to reduce upfront costs.

Keeping an eye on Gold Price in Pakistan can help you anticipate economic shifts that may affect smartphone prices in the coming weeks or months.

9. Future Outlook

If the rupee stabilizes and international gold prices fall, smartphone prices in Pakistan may also see a correction. But as long as gold remains above Rs. 400,000 per tola, high import costs and inflation will continue to pressure the tech market.

Experts predict that if global economic conditions remain uncertain, gold may climb even higher, keeping luxury electronics expensive in 2025.

FAQs – How Gold Prices Impact Smartphone Prices in Pakistan