Why gold prices not released in Pakistan today?

In a surprise move, the All Pakistan Sarafa Gems and Jewellers Association did not release the gold rates on Wednesday citing uncertainty as a reason behind its decision.

APSGJA President Haji Haroon Rasheed Chand, in a public message, confirmed the bullion rates were stopped because of the “uncertain market situation”.

Gold prices have been rising since the last many days and have cumulatively gained Rs17,600 or 10.91% per tola since December 1, raising concerns about whether the soaring price is sustainable or constitutes an unsustainable bubble.

Chand, however, blames speculators for taking gold prices to exorbitant rates. He said that contrary to the claims there is very less demand in the local market.

It should be noted that the APSGJA notifies the gold rates to the market every day after determining the price by keeping in view its rates in world markets, the rupee-dollar exchange rate, and demand and supply in domestic markets.

Recalling the situation during the coronavirus pandemic, Chand said in reality the market situation is similar to what happened during COVID-19.

“People don’t have purchasing power I am also sitting in the market I don’t see an extraordinary demand from investors or domestic buyers,” he said.

He stated that the association won’t release new rates unless the cost is determined based on the ground realities.

The price of gold on Tuesday surged by Rs3,900 per tola and Rs3,344 per 10 grams to settle at an all-time high of Rs178,800 and Rs153,292, respectively.

The association reported that the price of gold has been “over cost” by Rs4,500 per tola in Pakistan, as compared to prices in Dubai. This means that, at present, the Pakistani gold market is more expensive than the world market.

The shift from ‘under cost’ to ‘over cost’ also raised questions about the sustainability of the bullion price in Pakistan.

Experts anticipated that the price of gold may rise to Rs200,000 per tola due to the rupee devaluation against the US dollar under the current cycle.

Analysts believe that the unavailability of the dollar in Pakistan and the widening difference between interbank and open market exchange rates triggered the recent price hike; however, grey markets of the precious commodity have also added fuel to the speculations.

Reports also suggest that gold has gone out of stock in Pakistan. Earlier, it was learnt that demand for gold hit a record high at 13 tonnes (worth around $800 million) in July-September 2022, rising by 34% quarter-on-quarter, in the three months after the US dollar, and other leading foreign currencies went out of stock from the legal markets.