Traders stop issuing gold rates amid reports of law-enforcement crackdown

Gold traders have stopped issuing bullion rates in the last two days, as reports emerged that law-enforcement personnel were conducting a crackdown against some sections of the market.

The price of 24-carat gold had closed at Rs215,000 per tola on Tuesday, September 12, according to rates shared by the All Pakistan Gems and Jewellers Sarafa Association (APGJSA) back then.

“The bullion market is not issuing new gold rates amid a crackdown against rate speculation and hedging,” a local trader, on condition of anonymity, told Business Recorder. Another trader said there is no exchange taking place as reports suggest that a raid has taken place in some sections of the market.

The development comes as the caretaker government initiated a large-scale crackdown against illegal economic activities such as smuggling and hoarding. It resorted to take action against all those involved in speculations in different markets, which resulted in some positive outcomes.

Pakistan Army’s top brass has also resolved to assist the government “wholeheartedly” in curbing all illegal activities which hamper economic stability, growth, and investors’ confidence, a press release from its media wing Inter Services Public Relations Pakistan (ISPR) stated last week.

Its action resulted in the rupee strengthening from a record low of Rs307.10 against the US dollar on September 5, to around 298 in the inter-bank market on Thursday.

Similarly, the open-market rate has also seen a significant improvement. It was quoted at 298 for selling and 295 for buying purposes on Thursday.

Gold prices in Pakistan closely follow trajectory of the US dollar and international rates of the commodity as the country remains a net importer of the precious metal.

During last week, gold prices witnessed a steep fall of over Rs30,000 per tola.

“Investors move toward gold amid rupee’s freefall, but there has been speculation in gold rates as well,” the trader said. “An artificial increase in demand of gold was also being created to give a push to its rates amid rupee’s depreciation.”

By the end of the previous month, the price of per tola 24-carat gold had reached Rs239,800 per tola in the local market, which was just Rs200 shorter than the all-time high price of Rs240,000 per tola witnessed on May 10, 2023.