Pakistanis purchase a significant amount of gold every year, with annual demand estimated between 60 and 90 tons. In monetary terms, this represents a value of approximately $8 billion to $12 billion, according to a recent report issued by the Competition Commission of Pakistan (CCP). Despite the scale of this market, more than 90% of gold trading in Pakistan takes place through informal channels, operating outside the country’s official regulatory framework.
Why Gold Demand Remains High
Gold holds deep cultural and social importance in Pakistan. Weddings, religious celebrations, national events, and gift-giving traditions continue to drive strong year-round demand. Beyond its cultural significance, gold is widely viewed as a secure store of value and a reliable investment, especially during periods of economic uncertainty and inflation.
Dependence on Gold Imports
Due to limited local production, Pakistan relies heavily on imported gold. Once imported, gold enters a distribution network consisting of:
- Formal markets, including licensed jewelers and regulated traders
- Informal markets, which operate with minimal oversight
The informal sector dominates the market primarily because it offers greater convenience, fewer restrictions, flexible transactions, and often more competitive pricing. However, this lack of regulation creates challenges for authorities in terms of monitoring transactions, maintaining transparency, and collecting taxes.
The Need for Better Regulation
As the gold market continues to expand, experts believe there is a strong need for policy reforms, improved documentation, and digital trading systems to ensure transparency and economic stability.
