KARACHI, Sept 29: The domestic gold price touched a new peak of Rs8,010 per 10 grams on Wednesday owing to continuous rally in its prices on international markets. On September 1, it was Rs7,796 per 10 grams.
The price of 10 tola gold bar (around 117 grams) has now climbed to Rs93,600 as the rate in international market surged to over $412 an ounce. Gold prices have been under pressure for the last few months in the wake of renewed surge in world oil prices coupled with a weak dollar. Generally investors turn to gold whenever dollar starts declining and oil price move higher.
Raisuddin Shaikh, member of All Pakistan Gem Merchants and Jewellers Association (APGMJA), said that buyers' attendance in the market had declined following phenomenal jump in yellow metal rates. "This is a peak buying season but the markets are facing paucity of buyers," he added.
The buying season of gold will now end from the first of Ramazan and it will regain the momentum in the last week of the holy month as many families have arranged marriage parties soon after the Eid.
Currently jewellery consumers are at the disadvantage as they are paying high prices to procure jewellery for brides. Gold is considered as a financial security of the bride and families make efforts to arrange it.
But, Mr Raisuddin said that the trend of giving too many jewellery sets has somewhat declined since domestic bullion rates have gone up. Many people now prefer to give cash to the bride instead of costly jewellery sets. Besides, rising cost of living as a result of persistent rise in prices of essential commodities has also caused a cessation in gold buying activities.
Society Jewellers Welfare Association President Saeed Qureishi said that sales of gold jewellery had been bottoming out as domestic rates were not currently affordable. "Our sales have dropped by 40-50 per cent as a result of rising prices despite the fact this is the buying season of gold in view of on-going marriages," he added.
He said the trend of making investment in gold had not yet fully developed in Pakistan. "People do invest in gold but it is hard to tell a specific percentage," he added.
Market analysts think that in Pakistan gold is purchased primarily for consumption and not for investment purposes. At a time when stocks and property markets are flashing the newspapers headlines there are little chances to cash the luck in yellow metal and currency.
Investment in gold may become a good option when the commodity will be traded in the commodity exchange. Currently Pakistan has no regular gold market and people feel hesitant to take the risk in investing in gold.
Domestic prices are solely dependent on the rates movement on international markets as well as exchange rate. A dealer said that forward trading in gold had already stopped for the last three months after a significant increase in international gold prices.