KARACHI: Local gold association on Thursday gave a price shock to buyers by jacking up the domestic one-tola (24 kt) rate to a new all-time high of Rs261,800, up by Rs800 from Wednesday despite a drop in world gold rate by $8 per ounce to $2,504.

All Sindh Sarraf and Jewellers Association (ASSJA) also jacked up the 10-gram (24 kt) rate by Rs686 to Rs222,451.

The association on Wednesday also increased the local rates despite no rise in world gold rates. The association had been adjusting local rates based on the rupee-dollar parity even though the local currency had not significantly fluctuated against the US dollar for many months.

According to All Pakistan Jewellers Manufacturers Association Chairman Mohammad Arshad, the soaring prices have significantly dampened the de­mand for jewellery, with sales plummeting to a mere 15-20 per cent. This is largely due to the diminishing purchasing power of consumers, who are already grappling with inflated power and gas bills.

He said people had gradually been suspending giving small gifts of gold rings, nosepins, chains, etc., to the brides due to unaffordable rates, and instead, they pay less than Rs5,000 cash to the bride. Besides, one gold bangle, which should carry a weight of at least one tola (11.666 grams) or even eight to nine grams, is also facing a sharp slowdown in sales due to unbearable prices.

The domestic gold pricing is based on international rates, which have been moving both ways owing to geopolitical tensions triggered by war-like situations between Iran and Israel.

Mr Arshad urged the government to step in and bolster the industry by incentivising jewellery exports. This, he believes, could potentially boost the number of exporters and provide a much-needed lifeline to the industry.

Published in Dawn, August 23rd, 2024