According to statistics on global gold demand released by the World Gold Council (WGC) on Thursday, gold’s consumer demand in Pakistan clocked up at 17.8 tonnes in the first half of 2015, showing a decline of 8.7% on a year-on-year basis.
On a sequential basis, however, quarterly consumer demand of precious metal in the country increased 14.4%, WGC data shows.
The year-on-year decrease in the overall demand of gold was caused by a notable drop in the demand for jewellery in the April-June quarter. Jewellery demand in Pakistan equalled six tonnes in April-June, down 17.8% from a year ago. Jewellery demand in the country for the first six months of 2015 remained 11.1 tonnes, down 3.4% from last year.
The rest of the overall consumer demand in Pakistan came from gold bars and coins. Clocking up at 3.5 tonnes in April-June, the demand for gold bars and coins showed a year-on-year decline of 30%.
Pakistan’s share in the global consumer demand of gold is miniscule. With world consumer demand at 714.9 tonnes, Pakistan’s share was only 1.3% in the second quarter of 2015.
The decrease in Pakistan’s gold consumer demand in April-June was in line with the global trend. Overall consumer demand of gold in the second quarter decreased 14.1% internationally because of China and India, the two dominant players in the global gold market.
WGC noted that extreme weather patterns in India overshadowed the second-quarter demand and had a direct impact on incomes in the rural population, which accounts for more than half of the Indian gold demand.
As for China, WGC said the drop of about 5% in demand during the second quarter was because of the domestic economic conditions and stock market volatility.
Speaking to The Express Tribune, All Sindh Saraf and Jewellers Association President Haroon Rasheed Chand said the spell of slow demand in the gold jewellery market seems to be finally over now. “People have started buying jewellery again. I foresee a bullish trend in the saraf market in coming months,” he said.
Gold traded at Rs45,200 per tola (11.6 grams) on Saturday, according to ASSJA. The local gold market was in the grip of a long bearish trend, as its price declined more than 25% in last four years, data compiled by ASSJA shows.
Each of the two gold-based mutual funds being managed by Pakistani asset management companies has posted a negative return in the last 365 days. Atlas Gold Fund and UBL Gold Fund have posted absolute returns of -6.7% and -7.8%, respectively, over the one-year period, according to the Mutual Funds Association of Pakistan.
The downturn in local gold prices was largely in line with the trend in the international market where gold prices are now hovering around $1,120 per ounce after reaching the peak of $1,895 per ounce in September 2011.
Reuters reported on Thursday the international gold price has touched a three-week high, as a weaker Chinese yuan kept equities under pressure, thus encouraging investors to seek safe-haven assets like gold.
