KARACHI: Amid a drop in world gold prices and gaining rupee against the dollar, consumers paid higher rates for the yellow metal during the outgoing fiscal year (FY21).

On Wednesday, one-tola and 10-gram (24 karat) gold rates rose by Rs2,800 and Rs2,400 to Rs108,000 and Rs92,592, respectively, from Rs105,200 and Rs90,192 on July 1, 2020.

World gold price plunged by $24 per ounce to $1,758 on Wednesday, June 30, from $1,782 on July 1, 2020 as quoted by Karachi Saraf and Jewellers Group (KSJG).

One dollar was equivalent to Rs168.20 on July 1, 2020 as compared to Rs157.70 on June 30, 2021 – a clear indication that the rupee had gained its ground against the greenback, thereby making imports cheaper.

Bullion buying remained volatile in the last one year in view of opening and closing of marriage halls as the Covid-19 pandemic spread across the country. Many families held small wedding functions at homes for their children, which helped cut down massively on marriage expenses.

When asked why domestic gold price rallied in FY21 despite price fall in world market, KSJG President Haji Haroon Rasheed Chand said, “Local rates are vulnerable to the rupee-dollar parity in addition to global gold prices. Local prices are fixed keeping in view these factors.”

He claimed gold demand usually remained depres­s­ed in the last one year owing to the pandemic and an uncertain marriage season.

For the low-income group, gold remains out of reach as the price is too high, Mr Chand said. The middle-class brings in old gold ornaments for exchange and replaces them with low-weight jewellery sets for their daughters due to cash crunch, he added.

He said people in different parts of the world have been investing in gold and bonds.

Chairman of All Pakis­tan Jewellers Manufac­tu­r­ers Association Mohammad Arshad said people who used to buy five-tola gold jewellery sets a year ago are now purchasing two-tola sets due to high prices and rising cost of living on account of soaring commodities and utility bills.

He said marriage ceremonies have also lost their charm in view of 150 guests’ limit placed by the government to curb coronavirus cases.

According to the figures of Pakistan Bureau of Statistics (PBS), import of gold during 11MFY21 fell to 142 kilogrammes ($8.5 million) from 275kgs ($11.6m) — down 48pc in quantity and 27pc in value during the same period last fiscal.

Jewellery exports in 11MFY21 swelled by 306pc to $13m the outgoing fiscal year from $3.2m in the same period in FY20.

Published in Dawn, July 1st, 2021