LAHORE: Gold is considered by many to be the most preferred long-term investment for investors hoping to save for their future. However, in Lahore, peaking gold prices and increased incidences of theft have compelled citizens to sell reserves and consider other options. The trend has dealt a severe blow to the gold trade, and more and more jewelers are opting to switch their businesses to those that offer better security.
The surge in lawlessness in Lahore has crushed businesses dealing in precious materials. A recent string of dacoities and robberies in residential areas and gold markets has compelled those holding gold to sell their stocks and look towards alternative avenues of investment.
“Consecutive robberies in gold markets have proven to be the last nail in our coffin. We do not feel secure sitting in our shops anymore,” says Rana Ikhlaq, president of the Qaumi Tajir Itehad, Jeweler Wing, Punjab, while talking to The Express Tribune. “The police, instead of providing security, has told us to hire security guards. This has added another burden on those who are already struggling to make ends meet.”
“Over the last four years, our gold business has declined almost 90%. Many have left this line of business, and many are preparing to leave. We have recorded a 25% decline in the number of outlets dealing in gold over this period, which is alarming. We used to record annual growth of 2% in the number of outlets in different markets prior to this,” he elaborates.
“Citizens, including the upper-middle classes, now prefer artificial jewelry. The rates of gold have shot up from below Rs8,000 per tola a few years ago, to Rs60,000 per tola as of now. This huge price increase has left people with no option but to opt for artificial jewelry.”
“Moreover, citizens who invested in gold a few years ago are now willing to shift their investments to other sectors, preferably real estate. The switch is not such a bad idea, as their money has more than doubled due to an increase in gold prices.”
“The majority of citizens now visit gold markets only to sell jewelry; very few come to buy fresh gold. Only the genuine buyer visits gold markets now, as investing in gold at this point in time is not more than an outright risk,” he adds. “The economic crisis has already affected the purchasing power of an ordinary citizen – it is hard for the majority to meet their needs – how can they, then, afford to purchase jewelry?”
“Goldsmiths, which were in this line of work for decades, are now diverting their children to other businesses,” Ikhlaq continues. “We have been spending from our pockets for a long time to meet expenses,” he says. “We only want the state to protect this sector by providing security; we’re hoping our profits will bounce back once the economic situation turns positive.”
Published in The Express Tribune, August 23rd, 2012.