ISLAMABAD  -  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, is said.

Sharpest decline in gold prices in 30 years is a turning point on the global economic map since financial crisis in 2008 after which investors lost interest in paper money and shifted towards gold, said Dr Murtaza Mughal, President PEW.

He said that gold tripled in value in last three years before a recent downturn which is amazing as no government can print gold like their currencies. Western central banks have been pumping trillions of dollars into the system to overcome 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 Murtaza Mughal said that sliding gold prices is seen by some as 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 hitting lives of people which has resulted in reduced demand while many investors are offloading precious metal resulting in sharp fall in the prices, he noted.

He said that efforts aimed at economic recovery have benefitted the rich only which has widened that wealth inequality. Recovery remained promising at the upper end of the wealth distribution while there has been no recovery for over 90 per cent.

Growing economic polarization has been shattering faith of the poor and middle class of the west in their system, said Dr Murtaza Mughal.

In this decade of uncertainty, many are getting attracted to the effective alternative of Islamic financial system, he said.