KARACHI: Jewellery buyers are not getting the maximum benefit of falling gold prices in the world market owing to the rupee devaluation against the US dollar from July 2015 onwards.

Dealers said buyers did get some benefit of the declining world gold price but domestic prices would have been more attractive if the rupee had not shed its value against the dollar.

If the yellow metal rates are taken from January 2015, it provided major relief to many jewellery buyers.

The country’s highest bullion rates of the current year were registered in third week of January 2015. Depending on the world price of $1,297 per ounce, 10 grams and one tola gold price were quoted at Rs42,385 and Rs49,450 respectively.

On October 28, 2015, the world price was $1,172 per ounce which translated into the domestic per 10 gram and per tola rates of Rs40,628 and Rs47,000 respectively.

On November 5, 10 gram and one tola were priced at Rs39,385 and Rs45,950 when the world gold price was $1,106 per ounce. Amid fluctuating prices, the 10 gram and per tola rates had plunged by Rs3,643 and Rs4,250 respectively from January to date.

On Thursday, the 10 gram rate moved up to Rs38,742, up by Rs257 from Wednesday while per tola rate slightly rose by Rs300 to Rs45,200.

According to KASB Research, gold prices fell to $1,064 per ounce on Wednesday, the lowest since 2010, but rallied to US$1,076 per ounce on Thursday after the Federal Reserve meeting minutes. The news release suggested that Fed officials are likely to raise interest rates in December, provided that economic data is supportive.

KASB Research said it is important to note that the minutes reflected Fed officials’ thoughts prior to the last jobs report which came in better than expected. Despite the rally, analysts expect the upside to be limited.

“People are certainly getting cheaper gold in Pakistan but falling rupee strength has deprived consumers from getting true price relief,” member executive committee of FPCCI and former chairman All Pakistan Gem Merchant and Jewellers Association, Saeed Mazhar Ali told Dawn.

“If one dollar gets equal to Rs101 then the per tola price should have been Rs43,000 today based on the current world price,” he explained.

The rupee had witnessed 4.5 per cent devaluation against the greenback from July 2015 to date making imports costlier. However, he said, depressed gold rates had encouraged jewellery buyers to improve their purchases, thus pushing up sales by 20-25pc in the current year.

Saeed said gold in Karachi was costlier by Rs1,000 per tola then Dubai.

Published in Dawn, November 20th, 2015