Gold prices have hit 14 new peaks during last two and a half months on the back of surging global prices. The rise of gold beyond $1,784.71 an ounce earlier this week in the international market and past Rs. 50,952.37 per 10 gram in local market prices has generated fresh interest in the yellow metal.

The increase is observed after the price of gold in the international market persistent to mount beside the depreciation of the Pakistani rupee.

From time immemorial, gold has been respected as the best used precious metal not only due to its usage in ornaments but also as a widespread means of investment 'a saving for a rainy day'. It is the most credible mean of investment, which offers better returns than fixed deposits. The popular opinion is not unjustified as there has been a tremendous increase in the price of gold over the years.

But investment experts believe that people may not return to this traditional safe haven of investment until the planned commodity exchange is in operation. Gold traders say that long- term investors, who traditionally invest in the yellow metal, also find it difficult to go for gold because it is not the right time for buying — the prices are too high.

According to All Sindh Sarafa Association’s Chairman Haji Haroon Chand people do invest in both jewellry and gold bar but currently they are backing off due to high prices.

“Whenever gold prices go high — investors as well as end users do not take the risk. They do put up their money in the precious metal when prices stabilize,” he said.

“For long term purpose, gold is still considered the best investment option, which is evident from the increase in its prices over the years,” he adds.

Substantial increase in the cost of living and the subsequent decline in purchasing power has affected the sales. However, the ratio of visits by the buyers to the jewellers' shops has not declined but buyers prefer purchasing lighter jewellery.

Since January this year domestic gold prices have gone up by about Rs 10,000 to more than Rs17,600 per 10 gram mirroring the rise in prices in the world markets.

There is a class of long- term investors still taking interest in gold. People who bought gold at Rs 24, 000-28,000 per tola four years back now have a reason to rejoice as its price has jumped to Rs 58,900 per tola today.

Pakistan produces one of the finest gold jewellery, particularly plain and generally studded, and its hand made designs are second to none in the world. It is also gifted with vast deposits of world class precious and semi-precious stones including rubies from Hunza Valley, pink emerald of Swat, and peridotes from Kohistan.

No wedding ceremony in Pakistan is complete without gold jewellery which traditionally has become the most expensive item on the dowry list for parents of brides and also for the prospective grooms.

Every age of women wanted to wear jewellery and bangles to look more attractive. Following the trend, the shops were full with bangles and artificial jewellery of different colours. In Pakistan, like many other countries in the region, gold jewellery is more than a thing of beauty, a joy for everyone, particularly the women folks.

Sales of gold, particularly jewellery, have increased over the years due to an increase in population. According to Ikhlaque, a local jeweler, ‘sales are ‘OK’ in spite of a substantial increase in the price of gold.’

Qurat, while shopping for her wedding scheduled in November, said that owing to the high price of gold, will buy an artificial set for her marriage day and a small necklace or locket set of gold for her dowry.

Talking about major problems detrimental to gold sale and consumption in Pakistan, Yousuf , a Jeweler said that the problems are many dimensional, including lack of qualified designers and schools, absence of mass production and diversification.

There are neither design schools nor qualified designers with exception of may be one or two and the government should realize that if this particular issue is not tackled a there would be further decline in gold trade.

As gold hits record highs, some couples are being forced to postpone, or even cancel, their weddings because their families cannot piece together a suitable dowry. In places like northwestern Swat Valley, no gold means no wedding, because this is a place where tradition trumps all.

For years, the dowry tradition has come under criticism both by politicians and the Pakistani media, which describe it as an unnecessary extravagance that leaves families in debt and misery. Some local mullahs have sought to discourage people from overspending on gold, saying Islam’s prophet did not support the concept of the dowry.

Whereas politicians’ and mullahs’ lectures failed to end the gold dowry culture, it seems that high prices could finally force Pakistanis to break with the tradition.

Gold is a status symbol in Pakistan, where no bridal ensemble is complete without ample if not excessive solid gold accessories, from numerous rings and earrings to elaborate bracelets and necklaces.

Shortly before a wedding, the proud parents will customarily display the wedding jewellery to guests. After the wedding, the bride enters her new husband’s home adorned with the gold, which is not provided for decorative purposes only. It is also seen as an investment in the family’s future.

With the enormous rise in gold prices, artificial jewellery markets are witnessing a boom as customers resort to alternative sources to make up for their needs of ornamentation on weddings, etc.

A significant drop in the sales has been observed in the yellow metal for the past few years.
Artificial jewellery is becoming more attractive and inexpensive for women and they can also get a variety of designs and colours in it.

Market people and local shopkeepers say people have started buying artificial sets even for wedding purposes with heavy bridal sets being very much in demand.

A normal artificial set can be made of silver, 18 carat gold or of brass, copper, 2 per cent silver, semi-precious and artificial stones. One heavy bridal set usually costs Rs. 30, 000- 45,000 ($320 to $510) on average, said Butt, a gold dealer at Liberty Market.

The increasing gold price has moved the jewellery fashion 2011 towards a new direction where the focus in not on the metal rather gems. Semi precious gems, pearls and beads are jewellery fashion theme, as they are a true symbol of feminine beauty.

The newness comes from the latest colors in which the pearls are dyed these days so that they can compliment any sort of outfit. This is what distinguishes today’s Pakistani jewellery trend from the yester year and the old 70s pearl jewellery fashion which was absolutely out till the last year.