Local investment in gold surges 30pc in three months

[LahoreEstate]

KARACHI: Keeping pace with the world, the trend of investing in gold is picking up in Pakistan. Bullion dealers claim 25-30 per cent increase in investment in the last two to three months.

The 10 tola bar has so far been the main focus of investors’ interest while gold coins and one tola bars have also been in demand, Chairman All Pakistan Gem and Jewellers Merchants Saeed Mazhar Ali said, adding that investment in the yellow metal has risen by 30 per cent.

He said people hoping for an upswing converting their savings in gold keeping in view persistent increase in its prices on the back of surging rates in the world markets.

He added in world markets where investors were already active, many countries had speeded up their efforts in lifting maximum gold to boost their reserves after volatile currency markets in which dollar was losing its strength against major currencies. Contrary to world trend, the dollar was gaining against the rupee making imports costlier.

Indian and Sri Lankan central banks have purchased 200 tons and five tons of gold, respectively, from the IMF.

Meanwhile, Chief Executive Officer National Commodity Exchange Limited (NCEL), Samir Ahmed said that people had always invested in the yellow metal.

It is estimated that about 70 per cent gold demand is user/jewellery related, 20 per cent investment related and about 10 per cent industry/medical usage related, the NCEL CEO said. Traditionally people understand it as a savings/investment instrument. Previously it was done through jewellers, not it can be traded on a regulated platform like the exchange, he said.

However, the NCEL certifies the purity of the product which is directly imported from Swiss refineries and has a unique serial no and tamper proof packing, he said.

Roughly NCEL turnover in daily gold trading is Rs250 million though it can vary.

‘We have 45 brokers who are active and they have a current client base of a little over 1,000,’ he added.

He said the NCEL on Thursday launched two new gold contracts one ounce and 100 ounces. Previously, the Exchange had 10gm, 100gm, 10tola, 50tola, 100tola.

He expected that the new products to increase investment and trading volumes. Exact numbers are hard to predict, because it can vary with the movements in gold prices.

Due to the rise in prices user demand may have gone down but it is only temporary, Samir said. Gold all over the world has always had a special position with people. At the same, global investment demand has gone up as gold and more generally commodities are now recognised as a legitimate asset class, he added.

President Karachi Saraf and Jewellers Group, Haji Haroon Rashid Chand says that the trend of investing in gold has gone up by 25 per cent. Not only investors but some well off and upper income group people, having surplus cash, have also become active in lifting 10 tola bar mainly to safeguard their previous saving from other sources.

Even property, stock and currency players are active in gold investing, he added.

The increase in gold price has affected the gold jewellery sales as people are now more interested in compromising on quality and weight. Now many families prefer making jewellery of 18 carrot instead of 21-22, Chand said.

The one tola bar is now priced at Rs35,250 as compared to Rs35,000 on Wednesday. The 10-gram is available at Rs30,214 as compared to Rs30,000. International price touched an all-time high of $1,123 per ounce on Thursday as compared to $1,115 on Wednesday.

http://www.dawn.com/wps/wcm/connect/dawn...nths-hh-02