KARACHI: Gold continued its downward spiral owing to declining trend in world market which persists for the last one week, thus providing a slight relief to jewellery buyers.

On Oct 28, 10-gram and one tola gold prices stood at Rs40,628 and Rs47,400, respectively, based on international price of $1,172 per ounce. On Thursday, 10-gram gold price dropped to Rs39,385 and one tola price declined to Rs45,950.

Dealers attributed the slump in domestic gold price to fall in international price which plunged to $1,106 per ounce on Thursday.

A gold dealer said this year’s highest rates of 10-gram and one -tola gold were quoted at Rs42,385 and Rs49,450, respectively in the third week of January when the world price was $1,297 per ounce.

According to KASB Research, gold price came down by $60 per ounce in the past six sessions. The drop came as the US Federal Reserve chair suggested that a rate increase in December is becoming more likely.

The KASB analyst sees short-term support at $1,100 to $1,105 per ounce while staying bearish. The markets await release of jobs data for guidance, the analyst added.

All-Sindh Saraf and Jewellers Association President Haji Haroon Rashid Chand said that in view of weakening prices, investors are cautious in lifting gold, anticipating a further fall.

He said that sales of jewellery sets had slowed down due to Muharram.

Chand claims that gold price in Karachi is higher by Rs900 to Rs1,000 per tola as compared to rates in Dubai.

Pakistan’s gold imports in July-September 2015 went up to 193kgs worth $7 million as compared to 91kgs ($3.8m) in the same period of 2014. Jewellery exports in July-September 2015 stood at $1.87m as compared to $1.9m in the corresponding period of 2014.

According to the figures of Pakistan Bureau of Statistics (PBS), gold imports dropped sharply to 578kgs ($23m) in 2014-15 as compared to 4,265kgs ($177m) in 2013-14.

Jewellery exports decreased to $7.5m in 2014-15 from $323m in 2013-14.

The above figures do not give a clear picture of gold consumption as according to bullion dealers, commercial imports have been nil for the last seven years and only exporters are importing the yellow metal for jewellery exports.

Jewellers estimate country’s annual gold consumption at 170 tonnes, out of which around 90 tonnes are generated by recycling. Most of the demand is met through smuggling of gold from Dubai.

Published in Dawn, November 6th, 2015

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