Gold vs Stocks in Pakistan: A 10-Year Performance Analysis

## The Great Debate Pakistanis love gold. It is culturally significant, seen as a safe haven, and easy to buy. But how does it compare to stocks? ## 10-Year Returns (2016-2026) | Asset | Nominal CAGR | After Inflation | |-------|-------------|------------------| | Gold (PKR) | 18.2% | 8.5% | | KSE-100 (Total Return) | 14.8% | 5.1% | | NSS Certificates | 10.5% | 0.8% | | Bank Deposits | 8.2% | -1.5% | ## But Wait... Gold's impressive returns are largely driven by **PKR depreciation**, not gold price appreciation in USD terms. PKR fell from 105 to 285 per USD in this period. ## Tax Treatment - **Gold:** No CGT, no wealth tax, but 17% sales tax on purchase - **Stocks:** 15% CGT if sold within 1 year, exempt after 3 years - **NSS:** 10-15% WHT on profit ## Liquidity - Gold: High (can sell at any jeweler) - Stocks: High (T+2 settlement) - NSS: Low-Medium (early encashment penalties) ## Verdict Gold wins on raw returns in Pakistan, primarily due to currency depreciation. But for building wealth, a **diversified portfolio** with 60% stocks, 20% gold, and 20% fixed income has historically outperformed all-gold allocation.