KARACHI, March 4: Domestic gold prices continue to scale new historical peak, touching Rs20,014 per 10 grams on Tuesday as compared to Rs19,757 on Monday and Rs19,500 on Saturday last in the aftermath of surging gold prices in world markets. The 10 tola yellow metal bar is now priced at Rs233,500.
The world gold price peaked to record $981.70 per ounce as compared to $975 on Saturday amid reports of UN Security Council sanctions against Iran, fear of US recession, falling US dollar against major currencies and rising oil prices.
Investors and even people have been active in lifting gold from world markets for the safe haven purpose in times of financial and economical crisis after they had lost their hopes in stock markets.
Rising prices in world markets coupled with imposition of taxes and duties on import, the arrival of gold through official channels in Pakistan declined sharply during July-Jan 2007-2008 as compared to same period of last fiscal.
According to the figures provided by the Federal Bureau of Statistics (FBS), a total of 507 kg of gold (worth $10.5 million) had arrived as compared to 8,339 kg ($151 million) in the same period of last fiscal year, showing a decline of 94 per cent both in terms of quantity and value.
The cost of gold imports was just Rs32 per tola, including import duty and income tax two years back but after the imposition of one per cent wealth taxes the cumulative impact of duty and taxes had surged to over Rs350 per tola.
While gold imports have been bottoming out, the jewellery exports from the country have been increasing. Many market pundits wonder as to where the gold finds its way into the country from amid sharp decline in imports.
FBS figures revealed that export of gold jewellery in July-Jan 2007-08 stood at $99 million as compared to $13.59 million in the corresponding period of 2006-07, showing an increase of 629 per cent.
All Pakistan Gem and Jewellery Merchants Association Chairman Saeed Mazhar Ali was of the view that the gold was actually being smuggled from Dubai, which was enough to justify that the yellow metal had been arriving from illegal sources.
Whenever the cumulative impact of taxes and duties exceeds by Rs150 per tola on import then the legal imports automatically switch towards illegal channels, he said adding that this has been actually happening since the 2005-06 budget, which raised duty and taxes on imports.
He said marriage season was now at its peak and families had returned to the markets. The well-off people did not bother about rising prices but people having limited budgets did face problems. He added that the sale of jewellery sets had increased to 50 per cent from 25 per cent after the start of the wedding season.
However, people having limited budgets usually purchase jewellery sets from Liaquatabad, and Kharadar, instead of turning to the markets on Zaibunisa Street, Tariq Road, and Clifton.
He said investors had been active in piling up gold bars in anticipation of better profits. Even businessmen are investing in gold business by opening shops in new shopping malls. Even the old shops are fully loaded with gold these days.
All Karachi Jewellers Group president Haji Haroon Rasheed Chand was of the view that the gold price in world market may hit $1,000 per ounce but it would come down as there is always a limit to surge in prices.
