Worrisome reports from the Pakistani Gold Market

Worrisome reports from the Pakistani Gold Market

The gold market in Pakistan finds itself in a state of uncertainty, marked by a prolonged suspension of bullion rates that has persisted for four consecutive weeks. This suspension emerged amidst a backdrop of discord within the jewelry industry regarding the establishment of a committee tasked with regulating this sector.

The genesis of this hiatus in official gold prices can be traced back to a government crackdown on speculators and traders. These individuals were accused of manipulating the market, causing a sudden and significant surge in gold rates during the previous month.

On September 12, gold prices within the local market experienced a staggering increase of Rs5,600 per tola, equivalent to 11.66 grams, reaching Rs215,000 rupees, despite a contrasting decline in the international gold market.

In response to these market disturbances, law enforcement agencies initiated a targeted operation aimed at speculators and traders involved in potentially manipulative activities.

This crackdown consequently led to the suspension of official bullion rates. Since then, gold has been trading unofficially at fluctuating rates, with prices hovering around Rs190,000 rupees per tola, aided by the appreciation of the local currency, as reported by traders.

To address the complex issue at hand, the Ministry of Commerce embarked on a path to resolve the matter by forming a committee. This committee was envisioned to comprise representatives from diverse stakeholders, encompassing jewellers, traders, exporters, and importers.

However, the committee's formation has been beset by discord and disputes among jewellers, particularly concerning the committee's composition and the scope of its mandate.