CCP advises gold market regulation before Reko Diq project

KARACHI: The Competition Commission of Pakistan in its assessment of Pakistan’s gold market has recommended constitution of an authority for documentation of the market.

The CCP in its study said that the gold market lacking documentation and transparency with regard to prices.

“Pakistan has 60 to 90 tons annual gold consumption,” competition commission said adding that over 90% gold trade has been from informal channels.

CCP said that in financial year 2024 Pakistan had imported gold worth 17 million US dollars.

“Reko Diq gold project will produce 74 billion dollars gold within a duration of 37 years, having likely strength to change the gold supply chain” CCP said. Most dealings of precious metal are cash-based owing to the undocumented market, CCP observed in its study.

According to the study, different groups of traders affect gold supply and prices. “There is no market mechanism in country to fix the price. Associations in different cities fix prices on daily basis”.

CCP said that there is absence of comprehensive regulation to regulate the gold market in country. “A complicated taxation system over gold transactions, promote smuggling and under invoicing,” according to report.

Competition Commission said that the gold refining facility has been almost absent in the country. Authentic data of gold imports, sale and purification level has been unavailable and in absence of this data an effective policy making is impossible, CCP observed.

The CCP urged for introducing comprehensive reforms to organize the bullion market and recommended constitution of Pakistan gold and gemstone authority for licensing, import and anti-money laundering regulations.

The CCP study also recommends a compulsory assessment and classification of the quality of the metal. “Gold sale and buying should be attached with the track and trace system of the FBR”.

“A gold bank system should be established over the Turkish model,” CCP advised.

The Competition Commission also said that introducing gold market regulations, has been compulsory before commercial beginning of the Reko Diq project.