Gold prices in Pakistan slightly inched up on festive demand, but dealers are not happy as its local demand decreased owing to the instability in its prices in the international and local markets.
Through the legal channels, the dealers or traders of gold have so far imported around 437 kilogramme gold worth $15.823 million from July-Jan of the current fiscal year to fulfill its demand in the country, the data of Pakistan Bureau of Statistic said.
Pakistan’s annual demand of gold consumption is 120 tonnes compared to the global demand estimated at around 4,300 tons last year. Global demand is expected to grow by 5 percent this year.
The sales of jewelry items picked up from December 2015 and it would continue till Ramazan owing to the wedding season in the country, the dealer said.
“The demand for the gold usually goes higher during December to March as this is a wedding season and families head towards the market to buy jewelry item , especially gold made-ups,” said Haroon Chand, president of All Sindh Saraf and Jewelers Association.
Gold prices have been inching up to Rs 48,748 per tolla or Rs 41,838 per 10 gram on Saturday in the local market. About two months ago, the 24 karat Yellow Metal was traded around Rs 45,800 to Rs 46,500 in Pakistani Sarafa markets. Chand hopes, “the ongoing upturn in gold prices seems to continue in the days ahead.”
One of the importer said price of gold is not set in the local market as this commodity is not being import through legal channels over the past eight years. The importers are bringing gold through illegal channels to avoid income tax and custom duty on gold. However, the government is not giving priority to this industry for last many years, he said. “More than half of its total demand is being smuggled into the country through different channels.
“The prices of Gold had inched up to Rs 2000 to Rs 3000 in the local market in last two months, while the general conception is that prices of this commodity may reduce again.”
Haroon Chand said the government should give more incentive to traders. Import of gold should be allowed at Zero percent custom duty. Only one per cent advance income tax should be on the traders of gold.
The analyst of a brokerage house said, “the upsurge in prices is a short-term and gold could fall back to Rs 44,000/tola in coming months.” He said the gold is going up in the local market as the stocks and oil prices are down.
He said local prices of gold are linked with international trade, so any upward fluctuations in global prices would reflect on the local rate of the yellow metal.
Gold prices across Pakistan had touched a five-year low in January 2015 with per tola price of 24 karat hitting Rs 43, 600 per tola and 22 karat being sold at Rs 39, 966 per tola.
Asif Ahmed a jewelry shop owner said the low prices attract general people to buy gold instead of artificial jewellery. He said that heavy selling by China in the Hong Kong market had brought the price of the precious metal under pressure in recent weeks.Gold prices in the international market have declined to just above $1,223 per ounce on Saturday from the peak of $1,895 per ounce in September 2011, registering a decline of about 35 per cent in almost four years.
According to reports, each of the two gold-based mutual funds being managed by Pakistani asset management companies has posted a negative return in last one year owing to its sliding rates in local markets.
According to the latest quarterly data released by the World Gold Council (WGC), total global gold demand in the first quarter of 2015 clocked up at 1,079.3 tonnes, down 1% from a year ago and 3.1% less than the five-year average of 1,114 tonnes.
However, the buying interest of the hedgers put the market sentiments steady as they remained active in manipulating gold futures during trading session along with keeping an eye on the future price and output.
An analyst said the gold price remained in the hands of manipulators in India, Pakistan and other major gold buying countries, as they remained busy influencing current prices and futures on speculations. The potential buyers in India and Pakistan remained busy in hedging. Buyers made deals according to their immediate needs. Local trading in gold remained dull on back of insignificant buying.
International analysts said that China is currently the biggest consumer of gold out of any country – including India – the Chinese government is also taking a more active role in financial markets and gold markets in general.
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very nice and well written! thank you!
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