KARACHI: As the rupee depreciated by 13.7 per cent against the US dollar in the last two days, the one-tola gold rate for the first time crossed the Rs200,000 mark despite a $6 drop on world markets to $1,936 per ounce on Friday.

According to the All Sindh Saraf Jewellers Association (ASSJA), the one-tola rate surged by Rs7,000 to Rs202,500 while the 10-gram saw a rise of Rs6,000 to Rs173,610.

All Pakistan Jewellers Manufacturers Asso­ciation chairman Mohammad Arshad told Dawn that there was no panic buying, which had been rampant in the last few months, and neither investors were selling their bars to gain any profit.

The meteoric rise in precious metal rates has made jewellery sets out of reach of many people, he said, adding that a 0.4 gram of gold nose pin carries a price of Rs7,000-8,000 which is certainly unaffordable for many cash-starved consumers.

When asked at what dollar rate the local gold prices are being fixed, he said if one dollar rate is taken at Rs275 then the price of one-tola comes to slightly less than Rs200,000.

As all the imported raw materials and finished items are linked with the interbank, gold has an exclusive exception as its prices have always been calculated on the open market greenback rate.

Samiullah Tariq of Pak Kuwait Investment and Development Company said investors were more active in gold buying for the last two to three months due to better returns while the dollar comes in the second spot.

Historically, real estate had remained the first preference of investors in terms of fetching handsome returns while big gains in the dollar had lured investors in the last two to three years.

He said gold is easy to store. A person spends millions of rupees to get gold bars in limited volume while the shining metal has also long been trusted as a safe haven. Transactions in gold are also easy as compared to dollars.

ASSJA President Haji Haroon Rasheed Chand said speculation has been thriving in the gold market but claimed that “investors are on the sidelines as they look more interested in dollars.”

He said jewellery sales have been negligible as soaring rates do not allow many families to think about gold buying.

According to the Pakistan Bureau of Statistics data, gold import rose to 236kg ($14.4m) in IHFY23 from 168kg ($10m) in the same period last fiscal year, up by 40pc in quantity and 44pc in value. Jewellery exports in IHFY23 slightly fell to $4.8m from $4.9m in the same period last year.

Published in Dawn, January 28th, 2023