KARACHI: The domestic gold prices have been falling after hitting a record on Feb 7, 2013, however market people and analysts said that people continued to buy yellow metal bars from the market considering it a worthy investment.

However, jewellers reported depressed sales owing to the falling purchasing power of an average family.

On January 1, 2013, the domestic gold price stood at Rs62,650 per tola on the back of global rate of $1,667 an ounce. The yellow metal hit the year’s record February 7 at Rs62,750 per tola owing to further jump in world gold price to $1,676 an ounce.

However, after February 7 the precious metal started plummeting owing to falling trend on the world bullion markets.

When the PPP-coalition government came into power in third week of March 2008, the local gold rate was Rs24,100 per tola while the 10-gram gold rate was quoted at Rs20,697 keeping in view of $1,024 per ounce rate in world market.

In the last five years, the per tola and 10-gram gold price swelled by Rs35,800 and Rs30,645 respectively. On March 14, the official rate, released by the jewellers’ body, is Rs59,900 per tola and Rs51,342 per 10-gram.

Surprisingly, the local rate has jumped by over 100 per cent in the last five years with the rise of international gold price by $561 per ounce to $1,585 per ounce currently as compared to $1,024 per ounce prevailing in the same period in 2008.

President All Sindh Sarafa Jewellers Association Haji Haroon Rashid Chand said people mainly investors in Pakistan had also been lifting gold bar as per their capacity owing to rising trend in prices in the last few years.

However, he said that jewellery sales continue to remain low at 50 per cent as people, perturbed by high cost of living, are bringing their old jewellery for sale and purchasing artificial and imitation jewellery sets.

Haroon claimed that the rate of import duty on gold has been unchanged at Rs600 per tola for the last four to five years.

Chief Executive Top Line Securities Mohammad Sohail said with improving activity at Pakistan Mercantile Exchange Limited (PMEX), local investors are focusing on gold investment.

Though most of the volume at PMEX is trade-oriented, serious investors are now gradually moving towards this regulated market as compared to unregulated bullion market.

Sohail said comparing other regional markets, the activity at PMEX looks too small due to limited products, high cost of execution and other reasons.

Gold price in world market went up by around seven per cent in 2012 despite presence of fiscal cliff. At PMEX, gold price fluctuated between $1,538-$1,790 per ounce in 2012. Traded volume at PMEX increased to Rs724 billion from Rs581 billion in 2011.