Pakistan's largely informal gold market is eroding economic value, weakening consumer confidence and discouraging investment, with more than 90% of trading taking place outside formal channels, the Pakistan Business Forum (PBF) has warned.

According to a statement issued on Friday, the Forum said Pakistan consumes an estimated 60 to 90 tonnes of gold annually, yet most transactions remain undocumented. This widespread informality, it said, distorts prices, encourages smuggling and under-invoicing, and results in significant revenue losses. The country is also heavily import-dependent, with gold imports valued at about $17 million in FY2023-24.

The Forum said the sharp rise in domestic gold prices during 2025 had further exposed weaknesses in market governance. Market data shows the price of 24-karat gold per tola increased from around Rs272,600 at the end of 2024 to about Rs456,962 by the end of 2025, a jump of nearly Rs184,362 within a year.

The statement said that informal, cash-based trading continues to allow unregulated networks to influence supply and pricing. It added that fragmented policy oversight, high and inconsistent taxation, complex compliance procedures, limited refining, assaying and hallmarking capacity, and the lack of reliable data on trader registration, sales volumes and quality standards have discouraged formalisation and weakened consumer protection.

The Forum also highlighted upcoming mining initiatives, particularly the Reko Diq copper-gold project, as a major opportunity to reshape Pakistan's gold ecosystem. With an estimated economic potential of up to $74 billion, the project could strengthen domestic supply chains and value addition if supported by a transparent and competitive downstream market.