KARACHI: Gold rates hit an all-time high of Rs245,100 per tola (24K) on Saturday, breaking the previous record of Rs 242,700 on Sept 2 last year.
A member of the All Sindh Saraf and Jewellers Association (ASSJA) said the gold rate rose by Rs4,900 per tola on the back of a $44 per ounce jump in the international market to $2,350 — yet another all-time high.
According to the association, domestic gold rates are adjusted by a premium of over $20 as against the prices in international market.
However, the rates issued by ASSJA are not followed by jewellers in Karachi. A trader said some gold dealers were offering a rate of Rs239,000-240,000 as buyers cannot further sustain the frequent price shocks.
He said that on Friday, the market in Dubai was lower than in Pakistan by Rs5,500 per tola, but on Saturday the two rates were almost equal.
Traders say investors are putting their money in bullion market to ensure future returns
Habibur Rahman, the chairman of Pakistan Gem Jewellers, Traders and Exporters Association (PGJTEA), said that “high gold prices, a low purchasing power and a deteriorating law and order situation have driven away buyers, especially during the last 10 days of Ramazan”.
He revealed that many shopkeepers had opted to keep their businesses closed after iftar this year. On the other hand, gold merchants used to keep their shops open for advance bookings and spot buying of jewellery for the post-Eid wedding season.
According to Mr Habib, the Gaza crisis and uncertainty over interest rate cut in June had combined to take the yellow metal prices to an all-time high.
He said many countries, including China, were piling up gold reserves while investors in Pakistan were putting their money in the bullion market to ensure future returns. He said the market was rife with speculations that investors would further shift towards gold as a safety net. If these speculations turn out to be true, the rate could climb to $3,000 in the international market upon fears that war is imminent.
A strengthening rupee against the dollar from Sept 5, 2023, to date has also helped in partially offsetting the impact of soaring world prices on the landed cost of goods. One dollar was trading at Rs307.10 on Sept 5 last year, as compared to the current rate of Rs277.91 in the interbank market. The rupee-dollar parity plays a vital role in determining local rates.
The chairman of All Pakistan Jewellers Manufacturers Association, Mohammad Arshad,
said those investors who have procured gold at Rs240,000 per tola, are out to sell it and make some profit. It means they are not taking further risk for investment.
He said the local markets lack buyers even though a post-Eid wedding season is not far off. Buyers are perturbed over the rising prices of food items and utility bills, forcing them to purchase gold-related jewelleries as per their requirement and cash limit.
As per data of the Pakistan Bureau of Statistics (PBS), gold imports plunged to 263kg ($17 million) in the first seven months (July to January) of the current fiscal year from 342kg ($21m) a year ago.
Published in Dawn, April 7th, 2024