Recent price hike has not only affected commonly used items but also precious metals like gold. Recent months have seen steady increase in its price and today 10 grams gold is priced at Rs 13,673 per/10 grams in Karachi. The reason given by the jewelers for the sky hitting prices is that demand is more than supply. Itâ€™s quite confusing since Pakistan has seen rise in poverty and people are seen complaining about the high prices. Question is who is buying all that gold?
Attraction to gold is not new. Gold has been known from prehistoric times and being used since cave ages. Itâ€™s possibly the first metal used by humans and women simply cannot resist the gold temptation. Craving for gold is as old as gold itself. There have been many efforts in the past by alchemists to create gold but none proved successful. The quest for gold stimulated European explorations and conquests in the Western Hemisphere. Much of the gold now extracted is used for jewelry but most countries also keep Gold reserves to back their currencies. The chief producers are South Africa, the United States, Australia, Canada, Russia, China, Brazil, Uzbekistan, Papua New Guinea, and Indonesia.
Gold is rightly called King of Metals. A relatively soft metal, gold is usually hardened by alloying with copper, silver, or other metals. White gold, a substitute for platinum, is an alloy of gold with platinum, palladium, nickel, or nickel and zinc. Alloys of gold with copper are a reddish yellow and are used for coins. The gold content of an alloy is commonly stated in carats, a carat being 1/24 part by weight of the total mass. Pure gold is therefore 24 carats fine; an alloy that is 75% gold is 18 carats fine.
Gold is widely distributed on the earth; although large amounts are present also in seawater, the cost of current methods for recovering it exceeds its value. Most gold is found in the metallic state in the form of dust, grains, flakes, or nuggets.
Brides in South Asia and other parts of the world are loaded with as much gold as possible. Gold prices usually increase in the marriage season but present surge is new phenomenon and it is creating difficulties for grooms to buy gold for their brides.
Jewelers are taking orders and one can buy the gold without taking it physically from the jeweler and can sell it after few days, earning a healthy profit. There are some people who have lots of money and they choose one sector and make excessive buying, thus increase demand and prices. When common man sees the opportunity and puts his money, big fish simply go out taking the profits and common people empty pockets. Same happened with Real State and Stock Exchange business. The property prices in Pakistan rose to sky heights during last two-three years. Every location saw prices doubling than the normal. When common people realized the opportunity, they started putting their savings (which was giving nothing since government reduced the national savings profits) to earn for life, big fish left taking huge profits with them. Itâ€™s estimated that property prices saw reduction of 30% in last few months. Later, the KSE saw the boom and history repeated itself. Now Gold is in the limelight. Few are getting richer and richer and many poorer and poorer.
Shakespeare wrote in his famous drama, Merchant of Venice:
“All that glisters is not gold, Often have you heard that told; Many a man his life hath sold, But my outside to behold; Gilded tombs do worms enfold”.