KARACHI, Nov 7: As the gold hit a new record peak of Rs16,328 per 10 grams on Wednesday stock market players do not still seem inclined to invest in gold. However, some general investors are now more interested in investing in bullion, gold traders said.

Market people, however, said that some stock investors with rich gains from shares business have found a renewed charm in securing their investment in the yellow metal since its prices have been frequently riding on the upward journey.

They say that some stock investors think that it is not feasible to take risk in the stock market as it may remain turbulent as long as the state of emergency and uncertain political situation exists in the country.

An analyst at a brokerage house, who asked not to be named, citing an example, said that in Pakistan hardly one or two out of 100 stock market players dare to cash their luck in gold as the trend of investing in gold has been very insignificant.

On the contrary, stock market players in world markets shift their focus towards commodity investment, including gold whenever stocks show bearish trends.

He said if the gold trading in National Commodity Exchange Limited (NCEL) remains highly effective then stock players would turn towards the gold in larger numbers.

The one tola bar price also touched a record at Rs19,050. Gold has been defeating all the historical records for the last few months not only in the world markets but also in the domestic market.

Investors and even some countries in the West and other parts of the world are now more active in lifting gold since the political tensions between the US and Iran intensified followed by tension between Iraq and Turkey, losing charm of greenback against euro and boiling up of crude oil prices in world markets.

Last year, global gold prices hit the highest level of $759 per ounce while tezabi gold (10 grams) touched the peak level of Rs14,400, while gold per tola rate was Rs16,600.

On Wednesday the international gold rate hit $842 per ounce as compared with $807 three days back.

President All Sindh Sarraf and Jewellers Association (ASSJA) Haji Haroon Rasheed Chand said that some local investors had definitely turned their focus on the gold after smelling some instant short-term gains triggered by continuous price hike trend in world markets. However, he said, he was not sure that these investors included stock market players.

Haroon said that under the prevailing circumstances investment in gold could be termed as highly safe and sound in view of the return. People used to invest in gold for long-term purposes but since the prices were surging on daily basis, they now see quick return.

It seems that many people have started investing in gold after emergency imposed in the country in order to meet any uncertain conditions in times of crisis, he added.

The gold price has surged by Rs4,000 per tola since the month of Ramazan, which is enough to attract people having surplus money in hand, he said.

The phenomenal price hike has, however, literally hit the sentiments of many people, who are out to buy jewellry sets in the wedding season. “People are now placing orders for only three to four tola jewellry sets instead of earlier orders of eight to ten tola sets, when rates were down,” he said adding that the same trend has been witnessed on spot buying in jewellry.

He said sale of jewellry has declined by 50 per cent since the yellow metal price has hit new peaks.

Chairman All Pakistan Gem Merchants and Jewellers Association (APGMJA) Saeed Mazhar Ali also rejected the impression that the stock investors had started making investment in gold. There might be some people investing in gold but they are in very small numbers, he added.

Because of increase in prices, he said, the people are not compromising on quality. They are still buying 22 carrot gold jewellry sets but of lesser weight as they have limited budget for buying jewellry sets. He said the jewellry sales have been very depressed or below 50 per cent as compared with last year despite the on-going marriage season.

Gold has been selling under cost in Pakistan since September or Rs200-300 per tola less than the Dubai market, which actually encourages gold exports.

As a result, gold jewellery exports increased to $14 million in September 2007, as compared with $3.2 million in August and $2.8 million in September 2006. In July-September 2007, jewellery exports stood at $20 million as compared with $6 million in the same period of 2006.

Gold imports have plunged by 87 per cent in quantity to 314 kg ($6.3 million) in July-September 2007 from 2,555 kg ($48 million) in the same period of 2006, showing a decline of 87 per cent in terms of value.

Gold imports used to cost only Rs32 per tola, including import duty and income tax ahead of announcement of the budget 2006-07. After the imposition of one per cent wealth tax, the cumulative impact of duty and taxes had surged to over Rs200 per tola.