Pakistan’s Gold Market Faces Reforms Amid Smuggling

Pakistan’s gold market remains largely informal, with over 90% of the trade conducted through undocumented channels, according to a recent report by the Competition Commission of Pakistan (CCP). The study reveals widespread tax evasion, weak regulation, and price manipulation, making the market vulnerable to fraud and smuggling. Despite consuming 60 to 90 tonnes of gold annually, most of this trade escapes formal oversight.

The CCP report highlights that many gold traders operate without registration, and most transactions are conducted in cash to avoid taxes. In 2024, Pakistan officially imported gold worth $17 million, but the true volume is likely much higher due to under-invoicing and smuggling. The lack of standardized pricing mechanisms has led to informal price-setting, with no national system in place to regulate gold prices.

Market manipulation is another major issue, with trader groups influencing both the supply and pricing of gold. This creates the potential for artificial shortages and price hikes. The report also points to inadequate gold testing facilities, leading to fraud and adulteration in the market. Moreover, Pakistan’s gold refining capacity is minimal, weakening control over purity and supply chain traceability.

The CCP’s report emphasizes that the gold market suffers from a lack of reliable data and documentation. This absence of information has hindered effective policymaking and oversight. The commission also criticizes the complex tax structure, which it argues incentivizes smuggling and off-the-books trading, contributing to the market’s fragmented and opaque nature.

To address these issues, the CCP has recommended urgent reforms, particularly ahead of the Reko Diq Gold Project, which could revolutionize the country’s gold supply chain. Proposed reforms include establishing a Gold and Gemstone Authority, licensing gold traders, tightening anti-money laundering rules, and implementing a quality testing and grading system. These changes aim to bring transparency, accountability, and competitiveness to Pakistan’s gold market.

READ MORE : Kuwait Bans Cash Transactions in Gold, Precious Metals

The Ministry of Commerce and Industry in Kuwait has implemented a ban on cash transactions for companies operating in the gold, precious stones, and precious metals sectors. According to Ministerial Resolution No. 182 of 2025, all companies must now complete transactions using non-cash methods approved by the Central Bank of Kuwait.

The new measure aims to enhance transparency, prevent money laundering, and ensure compliance with financial oversight standards. The resolution mandates that payments be made digitally or through other approved non-cash channels. The ministry emphasized that failure to comply with these rules would lead to the closure of offending businesses and their referral to investigative authorities.