KARACHI: Gold prices (per tola) witnessed an increase of Rs8,800 owing to increase in global prices, coupled with the devaluation of rupee against the dollar.
One tola gold is now priced at Rs62,500, showing a drop of Rs600 as compared to Tuesday’s rate.
The 10 gram yellow metal sells at Rs53,571, down Rs514 as compared to a day back.
Local gold prices dropped on the back of $25 per ounce fall in world price to $1,675 on Wednesday. From Jan 1 to Dec 19, 10 gram gold rate rose by Rs7,543 this year.
On Jan 1, international gold price was $1,565 per ounce as compared to current rate of $1,675, showing a jump of $110 per ounce in the last one year depending on political and economic developments taking place in Europe, US and the Middle East.
Earlier in January this year, one dollar was equal to Rs95.50 and Rs94.40 in open and inter-bank markets as compared to the current rate of Rs98.65 and Rs96.70.
In July-June 2011-2012, rupee lost value against the greenback by at least nine per cent. Devaluation of rupee usually increases cost of import of various items and raw material.
All-Sindh Sarafa Association President Haji Haroon Rashid Chand said that official gold import has remained insignificant as only exporters import the metal against their exports.
If an exporter imports 20,000 tolas for jewellery export, he has to bring back the same quantity within six months, otherwise his export license would be cancelled.
He said if government removes one per cent withholding tax on gold import, official gold imports would thrive. He urged the government to fix Rs50 per tola tax on gold import.
On investment in gold by market people and general public, he said investors move from one commodity to other depending on price fluctuations, but investment in gold has slightly declined in Pakistan this year as compared to 2011.
On local jewellery set sales, he said retailers are operating at only 50 per cent margin due to increase in gold prices and rising cost of living.
He added that a number of families continue to bring their old jewellery sets and even gold bars for making new jewellery sets in lighter weight. He claimed that gold in Pakistan is currently selling under cost by Rs400-500 per tola as compared to rates prevailing in Dubai.
He did not give a clear answer as to how local rates are determined when official gold imports are negligible and because there is no official figure regarding actual gold consumption and sales.
He said that gold rates at the bullion hall are fixed keeping in view the global rate and rupee-dollar rates.
Artificial and imitation gold jewellery sets have made deeper inroads in Pakistan and changing trend of wearing heavy jewellery sets by brides on their weddings is being witnessed owing to high gold prices, and deteriorating law and order situation.
According to PBS data, official gold import in 2011-2012 fell to 3,205kgs ($172m) from 2,834kgs ($110m) in 2010-2011.
Jewellery exports in 2011-2012 rose to $922m from $403m in 2010-2011.
In July-October 2012, jewellery export swelled to $906m from $186m. Gold imports plunged to 1,096kgs ($58m) from 1,181kgs ($62.5m) in the same period of 2011.