KARACHI, Sept 21: The local gold prices continued their upward march hitting fresh peak of Rs13,971 per 10 grams in sympathy of international bullion prices which on Friday touched new highs after the US dollar slide to record lows against the euro.
The local demand for gold will pick up from the middle of Ramazan as the marriage season kicks off after Eidul Fitr.
On Thursday the gold rate was Rs13,851 per grams. On September 1, gold tezabi was quoted at Rs13,202 and Rs13,020 per 10 grams on August 20. Currently one tola gold now costs Rs16,300.
In London bullion market, the spot gold prices on Friday hit 28-year high at $739 an ounce against $733 on Thursday.
Bullion prices have been under pressure on the world markets due to dollar’s continued weakness against the euro which has raised the metal’s appeal to speculative investors, fears about the health of the US economy, rising oil prices and heavy buying by China.
President All Sindh Saraf and Jewellers Association (ASSJA) Haji Haroon Rasheed Chand said last year international gold prices hit the highest level of $759 per ounce while tezabi gold (10 grams) touched the peak level of Rs14,400.
He anticipated that the gold price may cross the $750 per ounce mark in near future in case the above cited factors continued weighing in.
However, he claimed that fine gold rates in Pakistan were still lower by Rs300-350 per tola, while gold tezabi was also under value by Rs300-400 per tola.
About gold imports, he said official gold imports had been very negligible for the last one and a half years due to the imposition of one per cent wealth tax at import stage in 2005-06 budget paving the way for smuggling of the yellow metal from Dubai.
According to Federal Bureau of Statistics (FBS) gold imports had dropped by 33 per cent and 61 per cent in terms of quantity and dollar value in 2006-07. Imports stood at 24,168 kg ($224 million) in 2006-07 as compared to 35,887 kg ($567 million) in 2005-2006. In July 2007, gold import recorded at 254 kg ($5 million) as compared to 928 kg ($16.5 million) in July 2006, showing a decline of 73pc in quantity and 70pc in value respectively.
Mr Chand said gold imports used to cost only Rs32 per tola including import duty and income tax ahead of announcement of budget 2006-07. After the imposition of one per cent wealth tax, the cumulative impact of duty and tax had surged to over Rs190 per tola.
He said smuggling of gold from Dubai had been thriving for the last over one and half years because the cumulative duty and tax impact had exceeded Rs150 per tola.
“Current gold demand is now being met through smuggling while some market players have old stocks in hands,” he added.
He said currently gold buying had been slow but it would pick up momentum from the middle of Ramazan when marriage-related gold buying would be at its peak.
