In a bid to align itself with international standards and curb speculative practices, the gold market in Pakistan has undergone a significant transformation. A recent report in a National Daily revealed that a new pricing formula for gold has been introduced, based on interbank trading. This formula aims to set the price of gold in Pakistan slightly higher than the international market rate, adding a specific percentage per tola. These prices are then converted into Dirham before being denominated in the local currency. This shift is not just a change in numbers; it’s a game-changer for the Pakistani gold market.
The New Pricing Formula: A Step Towards Uniformity
The new pricing formula has been met with both anticipation and curiosity. According to Haji Haroon Rasheed Chand, President of the All Pakistan Gems and Jewellers Association, this formula is poised to bring uniformity in gold prices across the country. In recent times, the gold market had been plagued by speculative pricing that led to significant disparities in rates, creating confusion among buyers and sellers alike.
Eliminating Speculative Pricing
Chand emphasized that the adoption of this new pricing formula aims to tackle speculative pricing head-on. The presence of speculators and black marketeers had led to the sale of gold at exorbitant prices, further exacerbating the existing price disparity. With this new formula, the gold market in Pakistan is expected to regain its equilibrium, providing a more transparent and reliable pricing mechanism.
The Need for Effective Enforcement
While the new pricing formula shows promise, effective enforcement of these changes is crucial for success. Without proper regulation and oversight, the intended benefits might not be fully realized. It is essential for the relevant authorities to ensure that all gold traders and stakeholders adhere to the new pricing structure.
Resumption of Price Reporting
It is noteworthy that the All-Pakistan Gems and Jewellers Association (APGJA) had ceased issuing gold prices for nearly a month. The last price list was published on September 12, and this hiatus was attributed to law enforcement agencies cracking down on smuggling and tax evasion within the gold market. This action underscored the need for reform and a more transparent pricing mechanism.
The shift to a new pricing formula for gold in Pakistan is a significant step towards aligning the country’s gold market with international standards. It not only promises to bring uniformity to gold prices but also aims to eliminate speculative practices that have plagued the market for some time. However, it is vital to ensure that these changes are effectively enforced to deliver on their promise of transparency and reliability.