KARACHI, Sept 20: Surging international gold prices in the wake of US-Iraq tension during the last fortnight has finally resulted in price hike of over Rs160 per 10 grams in local gold prices.

Gold on Friday closed at Rs6,198 as compared to Rs6,030 per 10 grams in the first week of this month. The price of yellow metal has been crawling up by Rs20-25 per 10 grams in last more than two weeks when tension between US and Iraq intensified.

Gold has touched the highest peak of Rs6,360 in June this year due to price hike in international market to $329 per ounce in view of Middle East crisis and tension at borders of Pakistan and India.

In September 2001, gold was selling at Rs5,465 per 10 grams in local markets. In the last one year, gold prices have gone up by Rs733 per 10 grams.

International gold prices were $321 per ounce on Friday. On September 9, gold price went up to $322 from $319 per ounce.

However, gold dealers, under the hovering US-Iraq tension, say that domestic prices are going up in view of rising global price otherwise there is no element of panic buying or investors’ interest that resulting in gold demand and price flare up. Besides rupee has been gaining strength against the US dollar but its impact cannot be counted here as gold imports are suspended.

Vice Chairman, All Pakistan Jem Merchants and Jewellers Association (APJMJA), Raeesuddin Shaikh told Dawn on Friday that gold demand has been facing a lacklustre trend in local markets and only genuine buying is taking place in view of the on-going marriage season, otherwise the overall business is very dull these days.

“There is no stability of mind among buyers and sellers. Besides election is also round the corner. Gold demand is at low ebb these days,” he said.

As for investment purpose in view of US-Iraq tension in the region, he said the markets lack any investors’ presence.

He said gold imports have been suspended since the rising international gold prices due to war-like situation between America and Iraq.

“Only those dealers are importing gold on self consignment basis who are engaged in export business, otherwise regular gold imports are virtually suspended these days,” he said adding “exports are also not picking up. In July-August 2002, exports of jems and jewellery declined by 30 per cent and six per cent respectively as compared to the same period of 2001”.

However, in India the situation is reverse as the jewellers and dealers, according to reports, are forecasting increase in exports in coming months due to fears of US strike against Iraq as gold is considered a safe haven for investment purpose.

Raeesuddin said that importers are still reluctant to import gold despite government’s decision of allowing licence-free import of gold in July. Currency dealers say that importers and dealers have already stopped lifting Dirham and Dollar from the open market since the last one month to finance the gold imports.

The government in July had broken up the monopoly of some key players and importers of gold in the markets like ARY, Pardesi and Tessori by liberalizing licence-free import.