Revamped gold pricing formula to curb speculative pricing

KARACHI: Pakistan’s gold market has undergone a significant transformation, adopting a new pricing formula aimed at aligning it with international standards and putting an end to speculative pricing practices.

As reported in a national daily, this innovative pricing structure for gold is now rooted in interbank trading.

Under this new formula, the price of gold in Pakistan will be adjusted upwards by approximately $5 per tola, relative to the international market gold price, accompanied by a specific percentage increase. These rates will then be converted into Dirham before being further translated into the local currency.

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Haji Haroon Rasheed Chand, President of the All Pakistan Gems and Jewellers Association, expressed his endorsement of the new pricing formula. He asserted that this reform will usher in price uniformity, effectively curtailing the speculative pricing that had previously permeated the domestic gold market.

Chand also highlighted the disruptive influence of speculators and black market activities, which had led to the sale of gold at exorbitant prices, creating significant price disparities. However, the transition to the new pricing model is expected to rectify these issues. Chand emphasized the need for stringent enforcement of these pricing adjustments.

It’s important to note that the All-Pakistan Gems and Jewellers Association (APGJA) recently resumed the issuance of gold prices after a hiatus of nearly a month. Prior to this, the association had last published prices on September 12. The halt in price updates had resulted from a crackdown by law enforcement agencies against smuggling and tax evasion activities in September.