Gold fell 25%. Most of our savers barely noticed.

This is the Asasa Edit, our new monthly newsletter, and you are reading the first issue. It will reach you once a month from here on.

Each month you get three things. What is happening in the gold market and what it means for someone saving small amounts. What we have been building. And one idea about financial fitness, which is the habit side of money rather than the market side.

I will not tell you where gold is going next week. I do not know, and neither does anyone selling you that answer. What I can do is explain what moved and why, in plain language, so you can make your own decisions.

We have been taken aback by the response. Our user base has grown sharply over the last few months, and we are very happy to be building this with you rather than at you.

Gold has fallen hard, and doubled

Both of those are true at the same time. The gap between them is the most useful thing a saver can hold on to.

Why it fell

The honest explanation is boring. It is bond yields.

Gold pays you nothing. No profit, no rent, no coupon. So when safe US government bonds pay more than inflation, holding gold costs you something real. The US ten year yield went above 5.35% on 7 October, the highest since 2002, and gold went the other way.

This happened even though the backdrop looked perfect for gold. A war in the Middle East. Oil up close to 70% over the year. Gold still fell, because the yield on the alternative rose faster.

The part that reaches Pakistan

US inflation came in at 3.7% for September. Strip out food and energy and it was only 2.6%. Petrol alone was up 34.2% and accounted for more than half the rise in the month.

So it is not broad inflation returning. It is a fuel shock moving through a price index.

We import the same shock. Look at our own fuel prices on 16 October. Petrol came down Rs. 3.63 to Rs. 390.23 a litre. Diesel went up to Rs. 396.96. The world is short of refined product, not crude, and diesel is the one that moves goods, runs tube wells and backs up the grid.

That feeds our import bill, and the import bill presses on the rupee. The rupee has been steady near Rs. 278, which means it has absorbed the shock rather than deflected it. Inflation at home was 10.3% in September. The State Bank has held the policy rate at 11.5% since June. The IMF expects our inflation to rise to 9.9% in 2027, from 7.1% this year.

What this means if you are saving

Gold is not behaving as the simple hedge people expect. It sat almost still through a hot US inflation print. Over twelve months it is roughly flat.

Gold protects buying power over long stretches. It does not reliably protect it this month.

The people who got hurt this year bought in one lump near a dramatic high. The people who were fine were putting a little aside every month. That is arithmetic, not insight. Buying a fixed amount regularly means you buy less when prices are high and more when they are low.

A 25% fall is frightening if you hold one large position. It is an ordinary stretch if you are nine months into a ten year habit.

What we have been building

1. 01
   A second way to pay. Some of you told us the QR payment was not working cleanly. We have added RTP as a second option, so if one route gives trouble you have another.
2. 02
   A higher buying limit. You can now buy up to Rs. 1,000,000 of gold. The old limit was Rs. 500,000.
3. 03
   Mobile apps. Both apps are in testing now. Until they are out, Asasa runs at app.myasasa.com in your browser.
4. 04
   Independent verification of our gold. We are in the final stages of appointing a third party to verify that the gold backing your balance is actually there. We will publish what they find.
5. 05
   Shariah certification. An announcement on this is coming soon.

The last two matter more than they sound. You should not have to take our word for the gold. Somebody outside Asasa should check, and you should be able to read what they say.

Timing is the wrong thing to get right

Nobody gets fit from one visit to the gym. You also cannot get fit by reading about the gym, or by waiting for the perfect week to start.

Money works the same way. Security does not come from one clever decision. It comes from a small decision repeated until you stop noticing it.

This is why I keep saying the question “is now a good time to buy gold?” is the wrong question. It asks you to be right about diesel, the US Federal Reserve and the Strait of Hormuz. Nobody is reliably right about those things, including the people paid to be.

The better question is whether you have a way of saving that keeps working while nobody knows.

One honest caveat. Wealth mostly comes from raising your income, through your work or your business. Saving and investing preserve what you earn and grow it modestly. Nobody gets rich waiting on returns. But people who save steadily keep what they earn, and people who do not, usually do not.

Thank you for reading the first issue of the Asasa Edit. See you in a month.

Adil Saleem
Founder & CEO, Asasa