PEOPLE in developed world have moved on, but like other Asians, Pakistanis have yet to break out of the spell of the dazzling yellow metal. The culture of possession of gold in the form of ornaments, also perceived as a measure of financial security and family pride, is deeply entrenched in the public psyche here.

It is interesting that there is no incremental import of gold in Pakistan currently, according to the gold traders. Exporters and merchants say they are obligated by law to replenish the gold stock used by them in export through import of the commodity.

The year 2012 saw further escalation in the price of gold, consistent with the trend associated with the precious metal. On January 1, international gold price was $1,565 per ounce compared to the year-end rate of $1,675, showing a jump of $110 per ounce.

In Pakistan 10gm gold price increased by Rs7,500 to touch Rs53,571. Most local transactions use tola as a measure of weight which is little heavier than 10gm. The price of one tola gold hiked by Rs8,800 to touch the Rs62,500 mark. Keeping in view the erosion of the rupee value, the price hike in the local market seems to be on the lower side of the international price trend.

Traders insist that the total sale of gold in the domestic market has come down significantly for a variety of reasons. More than anything, they consider it a matter of affordability of the middle classes in Pakistan. During the wedding season, most families visit shops for exchange or remaking. People who can afford, do buy but no one does it as liberally as was the case, say, 20 years ago.

The high crime rate and precarious law and order situation has suppressed the temptation to flaunt gold possessions, which, in turn, has resulted in a major spike in the total amount of vaulted gold. No estimates of the total quantity or value of gold in the country, however, are available with banks or traders.

A bank did announce a scheme to offer lending against gold at competitive rates, but how far did it succeed could not be known as the bank said it was too early to comment on.

There is some opportunity for investment gurus to find ways to capitalise on the value of assets to energise investment in a sagging economy.

Gold tends to perform better in times of economic uncertainties. With a world in a flux with global financial problems yet to be sorted out that lend strength to the perception of painful de-leveraging in the near future. It would, therefore, be safe to expect a positive trend in gold price in the fresh year. In Pakistan, political uncertainties would not allow any dramatic changes in the framework of gold trading.

According to Pakistan Bureau of Statistics, gold import in 2011-12 fell to 3,205kg worth $172 million from 2,834kg worth $110 million in 2010-11.Jewellery exports, however, rose to $922 million in 2011-12 from $403 million in 2010-11.