KARACHI: One tola and 10 gram gold price in Pakistan soared by Rs20,600 and Rs17,662, respectively, during 2019 owing to a $239 per ounce rise in world gold price.

The one tola and 10 gram rates on December 31 were quoted at Rs88,400 and Rs75,790 based on world price of $1,522 per ounce as compared to Rs67,800 and Rs58,128 on January 1 when gold price internationally was pegged at $1,283 per ounce.

Chairman All Pakistan Jewellers Association (APJA) Mohammad Arshad recalled that 2019 would also be remembered the year when gold prices ‘peaked’.

“Local one tola gold price in the last week of August 2019 swelled to an all time high of Rs90,150 while 10 gram gold rate was Rs77,289. World gold price was $1,546 per ounce. Rupee devaluation against the dollar has played a crucial role in pulling up gold prices,” he said.

One dollar is now equal to Rs155 as compared to Rs139 on January 1. On June 24, one dollar rate reached the alarmingly high level of Rs164.

Safe investment

Increasing trend in gold price also lured investors the world over towards the yellow metal after interest rate was cut by the Federal Reserve.

“In Pakistan, investors also remained active in buying gold bars after losing hope in property and stocks. A 10 tola gold bar now costs Rs883,000 as compared to Rs670,000 in January,” the APJA chairman said.

However, falling buying power on account of rising food and utility bill rates slowed down sales of gold and jewellery sets during 2019, he claimed.

Meanwhile, Director Top Line Securities Mohammad Sohail noted that only “few people had purchased gold. Many rich [ones] have bought Pakistan Investment Bond (PIB) and US dollars.”

“In Pakistan, people who quietly invested in gold rather than the dollar definitely benefitted. Globally too, investors piled up gold in view of tensions between Iran and USA and low interest rates,” President All Sindh Saraf Jewellers Association Haji Haroon Rasheed Chand said. He claimed that gold jewellery sales had remained subdued due to falling buying power and ‘strict vigil’ by the Federal Board of Revenue on consumers’ income coupled with move to bring more people under tax net.

According of data shared by the Pakistan Bureau of Statistics (PBS), gold import plunged to 183kg ($7.4 million) during 5MFY20 from 200kg ($7.8m) in same period last fiscal. Jewellery exports during 5MFY20 fell by 8.8pc to $2.3m.

Published in Dawn, January 1st, 2020