Informal gold trade drains revenue, distorts prices

Pakistan’s largely informal gold market is eroding economic value, weakening consumer confidence and discouraging investment, with more than 90% of transactions taking place outside formal channels, the Pakistan Business Forum (PBF) has warned.

According to a statement issued on Friday, the Forum said Pakistan consumes an estimated 60 to 90 tonnes of gold annually, yet most transactions remain undocumented. This widespread irregularity, he said, distorts prices, encourages smuggling and underpricing and leads to significant revenue losses. The country is also heavily dependent on imports, with gold imports estimated at around $17 million in FY2023-24.

The Forum said the sharp rise in domestic gold prices in 2025 had exposed further weaknesses in market governance. Market data shows that the price of 24 carat gold per tola rose from around Rs 272,600 at the end of 2024 to around Rs 456,962 by the end of 2025, a jump of nearly Rs 184,362 in a year.

The statement said informal cash-based transactions continue to allow unregulated networks to influence supply and prices. He added that fragmented policy oversight, high and inconsistent taxation, complex compliance procedures, limited capacity for screening, analysis and labeling and a lack of reliable data on trader registration, sales volumes and quality standards have discouraged formalization and weakened consumer protection.

The Forum also highlighted upcoming mining initiatives, particularly the Reko Diq copper-gold project, as an important opportunity to reshape Pakistan’s gold ecosystem. With an estimated economic potential of up to $74 billion, the project could strengthen domestic supply chains and value addition if supported by a transparent and competitive downstream market.