KARACHI: Local gold prices touched an all-time high of Rs77,300 and Rs66,272 per tola and 10-gram, respectively, after international rates soared to five-year peak on Thursday.

The yellow metal surged to $1,386.42 per ounce before settling at $1,383.04 gaining $28 per ounce in the intraday trade — the highest since March 2014 triggered by a sharp decline in the dollar.

The dealers also justified the increase in local gold prices pointing to the bullish rally in international prices which have risen from $1,283 per ounce on Jan 1 to $1,386.42.

All Sindh Sarafa Jewellers Association (ASSJA) increased prices of per tola and 10-gram by Rs1,800 and Rs1,152 after a massive jump of $28 per ounce on the world markets.

Consumers have also decreased their spending on gold jewellery and moved towards artificial and silver jewellery for marriage and other festivities in the ongoing wedding season as prices continue to rise.

Chairman All Pakistan Jewellers Association Mohammad Arshad said “there is hardly 20 per cent sales of jewellery [compared to the previous season] despite booming marriage season after Eid.”

In addition to the rising international prices, persistent depreciation of the local currency coupled with rising inflation have discouraged gold buying.

ASSJA spokesman said local gold rates are determined keeping in view the demand and supply situation, impact of rupee-dollar parity and prevailing rates in Dubai gold markets.

He also said that normally, during the wedding season, consumers bring their old jewellery ornaments to be replaced with new ones but the situation is not the same this time around.

“In case, jewellery sales remain subdued on rising prices based on climbing world rates and rupee-dollar parity, our jewellery processing factories at the risk of closing down, rendering thousands of workers jobless,” he feared.

Pakistan’s gold imports have surged by 31pc to 300 kilograms in the 10 months of the ongoing fiscal year. On the other hand, jewellery exports plunged by 22pc to $4.25 during the same period.

The government has also been gold assets in its amnesty scheme and urged the traders to declare their gold stocks or risk penalties.

Published in Dawn, June 21st, 2019