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Gold import registers major slump

KARACHI: Gold import registered a major decline in July-May 2006-07 as
compared with the same period in 2005-06, importers said on Saturday.

The leading importers said gold import slumped during July-May 2006-07,
standing at 11,709 kg worth Rs 132 million in 2006-07, as against 33,290 kg
worth Rs 313 million imported in 2005-06.

They said smuggling through different channels, uneven taxation policy in
the country, withholding tax on import and rise in international prices has
also forced importers to slow down imports.

Imran Khan of Tessori Art Jewellers said for more than eight months, there
was no significance gold import in the country. Consequently, the import
witnessed a decline of around 58 percent. The leading importers in the
country include ARY Gold and Pardesi.

He said one percent wealth tax on gold import also has given impetus to
gold smuggling, which stood around 30 percent of the total gold import
during the same period in the country.

The domestic gold consumption also declined around 55 percent during
July-May 2007 as compared with the same period last year, he added.

However, the import of gold in April 2007 stood at around 1478 kg worth
Rs 175 million as against 1695 kg worth Rs 201 million in May 2007. During
May 2006, gold import stood at 4956 kg worth Rs 519 million.

According to Federal Bureau of Statistics (FBS), the import of gold
declined to around 1158 kg in July–May 2006-2007 as against 33,290 kg in
the same period last year.

The world gold prices are likely to meet resistance at around $697-$700 an
ounce as big investors turn cautious about the volatile precious metals
market. In tonnage terms, global investment accounted for around 19
percent of total demand last year.

In the international market, gold was stuck in a tight range and stayed on
the defensive on Friday, pressured by technical selling after it failed to
break an important chart level.

The spot gold was trading at $651.90, down from $655 in Hong Kong on

Since the start of 2007 gold has traded at an average of $51 an ounce. In
May last year, an ounce of gold hit a fixing price of 725.75 dollars on the
London Bullion Market, which was the highest level for more than 26 years.