ISLAMABAD, November 26: The Competition Commission of Pakistan (CCP) has released its maiden Competition Assessment Study of the Gold Market in Pakistan, providing the first evidence-based analysis of the sector’s structure, regulatory landscape, and competitiveness challenges. The study, conducted by CCP’s Center of Excellence in Competition Law (CECL), maps a market historically dominated by informality, fragmented oversight, and pricing opacity.
According to the report, Pakistan’s annual gold consumption ranges between 60 to 90 tonnes, driven largely by cultural demand, while over 90% of gold trading occurs outside formal channels. The market relies almost entirely on imports, with USD 17 million worth of gold imported in FY 2023-24. The study highlights the transformative potential of the Reko Diq copper-gold project, expected to generate up to USD 74 billion over its 37-year of useful life and significantly reshape domestic supply chains.
The report identifies deep-rooted barriers that suppress competition and distort market functioning:
Informal market dominance: Weak documentation and cash-based transactions allow large informal networks to set prices and influence supply.
Opaque price-setting: Daily gold rates are largely influenced by associations rather than transparent market mechanisms.
Fragmented regulation: Overlapping and unclear mandates of Ministry of Commerce, Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Pakistan Gems and Jewelry Development Company (PGJDC) , and Trade Development Authority of Pakistan (TDAP) create policy inconsistencies and enforcement gaps.
High taxes and compliance costs: Complex procedures, and inconsistent taxation encourage smuggling and under-invoicing.
Limited refining, assaying and hallmarking capacity: Pakistan has negligible refining capability and inadequate assaying and hallmarking facilities, leading to widespread purity issues and weak consumer protection.
Data deficiencies: Absence of reliable import, traders registration, sales, and purity data prevents evidence-based policymaking.
To address these challenges, CCP has proposed a comprehensive reform package:
- Establish a unified regulator: CCP suggest to establish the Pakistan Gold & Gemstone Authority to harmonize rules, licensing, imports, and Anti Money Laundering (AML) and Counter Financing Terrorism (CFT) compliance.
- Mandatory assaying and hallmarking nationwide to ensure purity, protect consumers, and enable exports.
- Digital transformation of the gold value chain with blockchain-based traceability integrated with FBR’s Track & Trace system.
- Creation of a Gold Banking System, inspired by the Türkiye, Gold Banking System to mobilize household gold into the formal sector.
- Strengthen data governance through centralized reporting, market documentation, and scientific price-monitoring mechanisms.
CCP emphasizes that modernizing the gold sector will boost transparency, safeguard consumers, reduce illicit trade, and unlock significant economic value, particularly as Pakistan prepares for the commercial rollout of Reko Diq.
Report is available at: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://cc.gov.pk/assets/images/Downloads/assessment_studies/Gold%20Report.pdf
