Gold price in clash with global trend KARACHI: The domestic rate for gold on Tuesday hit a new peak for 2016, despite a declining trend in international bullion rate during the current month, highlighting the disparity in daily gold rates released by All Sindh Saraf and Jewellers Association (ASSJA).
It has been noticed that when the international market rate is crawling up, the association has issued lower rates for the precious metal.
On Tuesday local yellow metal rate reached Rs51,850, up by Rs250 from Monday while per 10 gram rate went up by Rs214 to Rs44,442 based on international price of $1,321 per ounce.
On July 4, 2016, global rate was $1,352 per ounce while per tola rate was Rs50,950, followed by Rs43,671 for 10 grams.
On July 21, 2016 when international gold rate was $1,319 on July 21, the domestic rate was quoted at Rs51,600 per tola, followed by per 10 gram rate of Rs44,228.
On June 30, 2016, international gold rate was $1,318 per ounce and ASSJA issued per tola and per 10 gram rate of Rs49,900 and Rs42,771, respectively.
However, taking the price of $1,062 per ounce followed by Rs44,300 per tola and Rs37,971 per 10 gram prevailing in the first week of January this year, the per tola price has risen by Rs7,550 so far followed by Rs6,471 in 10 gram price and $259 per ounce rise in international gold rate price.
Surprisingly, the exchange rate, on which domestic bullion rates are also calculated, has not shown drastic fluctuations for the past few months. Bullion traders have kept the domestic rate up at a time when people are buying gold jewellery for the marriage season which peaks after Eid ul Fitr.
President ASSJA, Haji Haroon Rasheed Chand said domestic gold rates are released depending on prevailing world market rates, besides taking notice of trading activities and demand and supply situation at Bullion Exchange at Kharadar from where the rates are determined.
He said the government’s decision to put additional taxes on property deals has shifted many investors towards bullion thus creating some demand for gold buying. He claimed that gold in Karachi is cheaper by Rs700 per tola than Dubai. In Ramazan, gold was under cost by Rs2,700 in Karachi than Dubai rate.
Sources in gold market said some vested interests had kept the rate of gold under cost in Pakistan which means that gold is being smuggled out to Dubai.
Giving an example, sources said that for most of the days in a month, traders in Bullion Market Kharadar had been issuing under cost rates.
According to the data of Pakistan Bureau of Statistics (PBS), gold imports rose to 657 kg worth $24 million in 2015-2016 as compared to 575 kg costing $23m in 2014-2015. Jewellery exports in 2015-2016 went up to $8.5m from $6.6m in 2014-2015.
Gold traders had always said about negligible gold import in the last over five years. Gold is arriving under an entrustment scheme (SRO 760 of 2013) in which foreign buyers supply pure gold in advance to Pakistani jewellery exporters. After making 22 carat gold jewellery for value-addition, exporters ship jewellery to buyers through self-consignment and cargo.