Pakistan jewellers demand end to gold ban

This puts the government between two opposing camps: The jewellers’ association versus the money exchangers’ association which proposed the ban in July after imports rose more than 100%.

But behind all this lies the real culprit, India, where even the national government cannot curb gold demand. Since January, the country’s finance minister has implemented all sorts of measures to get people to stop buying so much gold – but to no avail. India, still the world’s largest bullion consumer, increased its imports again in July after slowing down a little bit in June.

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In response, the Reserve Bank of India imposed an 8% duty on imports, thinking demand would surely drop now. But no. Instead, buyers began brining the precious metal in through Pakistan where there are no gold duties at all.

Bullion imports are said to have devalued the currencies of both countries. On Wednesday India’s Rupee hit a record low. Pakistan’s jewellers, however, tell a different story.

Saeed Mazhar, a jewellers association representative, told Pakistan Today that the government’s overzealous printing of “billions of rupees” is to blame for a weakening currency. He also accused money exchangers of “providing foreign exchange for the alleged smuggling of gold.”

Another jewellery industry representative warned that a drop in gold could lead to thousands of job losses as factory workers find themselves with no raw material to work with.