Gold losing glitter since March

KARACHI: Domestic gold prices have plunged by Rs4,000 per tola since March this year on the back of falling world prices and rupee’s appreciation against the dollar. On Wednesday prices dropped by Rs600, to Rs47,900 per tola compared to Tuesday’s rate, and by Rs517, to Rs41,054 per 10 grams. International price dropped by $13 an ounce to $1,252 from Tuesday. Karachi Saraf and Jewellers Group’s president, Haji Haroon Rashid Chand, said gold price shed by Rs900 per tola in the last two days. He recalled that the highest rate of yellow metal this year was Rs52,000 per tola recorded in March. The fall of Rs4,000 per tola since March this year may have proved a sigh of relief for many families who have been purchasing on spot finished jewellery sets in the ongoing marriage season or placing advance orders. Mr Chand said people are coming to buy jewellery sets but sales are not very impressive because of shrinking purchasing power and high food inflation. Many families still bring their old jewellery sets and gold bars for making new gold ornaments of low weight and new designs. The trend of investing in gold remained usually mixed depending on the rates, but big investors definitely lift five to 10 tola fine gold bar, he added. He said gold was costlier by Rs400-500 per tola in Karachi as compared to Dubai. All Pakistan Gem Merchants and Jewellers Association (APGMJA) chairman Habibur Rahman recalled that on March 7 last year the international price of gold was $1,350 an ounce and since then it has been falling persistently due mainly to profit-taking by investors, slight recovery in US economic indicators and easing of tension between Iran and the US. Sales of jewellery sets and other related items are much better as low prices were luring buyers, he said. Gold imports have resumed from this month as its import was banned by the government from January to April, 2014. According to figures of Pakistan Bureau of Statistics (PBS), gold imports in the first 10 months (July-April) of this fiscal year stood at 4,177 kg ($173 million) compared to 4,482 kg ($236.5m) a year ago. Jewellery exports fell sharply during the period, fetching only $319m compared to $1.142 billion in the same period last fiscal. Mr Rahman of the APGMJA said jewellery exports still lacked the high pace which it witnessed in the previous fiscal year. On Pakistan’s gold consumption, he said it ranges between 20 and 22 tonnes a year. Since gold has always been imported for jewellery exports, domestic consumption is also met through smuggling coupled with arrival of old jewellery sets and gold bars in the market for selling and re-making of jewellery as per new designs and weight. He said cumulative duties impact on import of gold comes to around five per cent but the association has urged the government to fix Rs3,000 per kg as duty on import of gold for commercial basis. Published in Dawn, May 30th, 2014