KARACHI: The price of one tola of gold reached a new all-time high of Rs263,700 on Saturday, marking an increase of Rs1,700 per tola from the previous day. The surge comes despite a drop in global gold prices and raises questions about the transparency and regulation of daily gold rate fixes.
According to the All Sindh Saraf and Jewellers Association (ASSJA), the price for 10 grams of gold also rose by Rs1,457 to Rs226,080, following a $20 per ounce increase in the global gold rate to $2,512. Despite this, the ASSJA raised the one tola rate by Rs1,000 since Thursday (Aug 22), even though world prices had dropped by $20 per ounce.
Market participants and consumers are increasingly skeptical about the mechanisms used to set daily gold rates. There is confusion over why Pakistan, which does not import gold in bulk, continues to fix rates daily amid fluctuating global markets, currency exchange rates, and demand-supply dynamics.
Last year, jewellers faced scrutiny from law enforcement agencies (LEAs) over issues related to speculation, malpractice, smuggling, and hoarding. This resulted in the arrest of five jewellers, despite ongoing negotiations between ASSJA and LEAs. The association had temporarily suspended the publication of daily gold prices and later committed to addressing these issues, including improving transparency and documentation.
Despite promises to the LEAs, there has been little progress in adopting computerized trading and documentation practices. Consumers often do not receive computerized receipts, and jewellers still require old cash receipts for selling old gold items.
A gold trader defended the lack of transparency, citing demand-supply factors, world market prices, and exchange rate parity as determinants of daily prices. He claimed there was now “total transparency” in price fixation and that only physical trading was conducted. However, he acknowledged that full documentation was still a work in progress.
Habibur Rahman, chairman of the Pakistan Gem and Jewellery Traders and Exporters Association (PGJTEA), criticized the lack of a regulatory body to oversee gold price fixation. He urged the federal government to establish a regulatory authority and allow commercial gold imports to stabilize the market.
Mohammad Haseen Qureishi, chief of the All Karachi Jewellers and Manufacturers Association, echoed these concerns, calling for a government-regulated system for setting daily gold rates to eliminate speculative trading and other issues.
