KARACHI: Declining trend in world gold price and low cost of import of the precious metal on account of rising strength of the rupee against the dollar have caused a drop in one-tola and 10-gram gold prices by Rs11,800 and Rs10,117, respectively, from Jan 1, 2021 till to date.
The current rate of 24-karat one-tola and 10-gram gold is Rs102,500 and Rs87,877 as compared to Rs114,300 and Rs97,994 on Jan 1.
However, the fall in rates has been unable to boost sales of gold jewellery with the shadi season drawing to a close ahead of Ramazan.
The All Sindh Saraf Jewellers Association (ASSJA) said that international bullion rates have fallen by $206 per ounce to $1,693 from $1,899 on Jan 1.
One US dollar is now quoted at Rs157 in the interbank market as against Rs159.68 on Jan 1 earlier this year, making a firm case for low-cost imports of finished goods and raw materials.
Chairman of the All Pakistan Jewellers Manufacturers Association (APJMA) Mohammad Arshad linked the decline in gold price in the world market to “investors’ renewed interest in bitcoin which no country owns”.
However, reduction in yellow metal prices have provided ‘price relief’ to those seeking to buy jewellery for the ongoing wedding season.
While disagreeing about improving gold jewellery sets sales after increasing trend of weddings in the afternoon coupled with regular functions in the evening, Mr Arshad said many jewellery buyers are still waiting for further fall in bullion prices.
On gold investments in Pakistan, he said, “Investors have also adopted a wait-and-see attitude as the world and domestic rates have been falling persistently for the last 15-20 days.”
Topline Securities director Mohammad Sohail was of the view that “investors are putting more money in the stock market due to lower interest rates”.
President of ASSJA Haroon Rasheed Chand said investors in Pakistan are reluctant when it comes to taking risk in gold as they waiting for further price fall.
In world markets, investors have also shifted their focus towards stocks, real estate and bond from the bullion.
On the sale of jewellery sets, Mr Chand said many consumers are perturbed over rising cost of living due to soaring food prices and utility bills. “This [inflation] is keeping sales of jewellery below 50 per cent despite thriving afternoon marriage ceremonies.”
Pakistan’s import of gold in July-Jan 2020-21 stood at 77kgs worth $4.7 million as compared to 244kgs valuing $10m in the same period last fiscal year — a massive fall of 68pc in quantity and 53pc in value.
As per figures of the Pakistan Bureau of Statistics, jewellery exports in 7MFY21 swelled by 107pc to $5.8m from $2.8m in the same period last fiscal year.
Published in Dawn, March 9th, 2021