More than 90% of Pakistan’s gold trade operates through informal and undocumented channels, according to a major “Assessment Study” released by the Competition Commission of Pakistan (CCP) on Wednesday.

The report highlights pervasive tax evasion, weak regulation, and price manipulation that have left the gold sector vulnerable to fraud, smuggling, and market abuse.

According to the CCP, Pakistan consumes 60 to 90 tonnes of gold annually, yet the vast majority of this trade remains outside formal oversight.

Informal trade, cash transactions, unregistered dealers dominate

The study reveals that a large number of gold traders are unregistered, and most transactions are conducted in cash specifically to evade taxes. Gold worth $17 million was officially imported in 2024, but the CCP noted that the true volume is far higher due to widespread under-invoicing and smuggling.

The report warns that Pakistan’s gold market suffers from undocumented and non-transparent price mechanisms, with daily rates set informally by associations in various cities. There is no national system to standardize or regulate prices.

Market manipulation and weak infrastructure

The CCP states that trader groups influence both supply and pricing, creating risks of artificial shortages and manipulated increases. In addition, inadequate gold testing facilities have opened the door to adulteration and consumer fraud, as purity and grading standards are neither consistent nor mandatory.

Gold refining capacity is “almost non-existent” in the country, the study adds, further weakening control over purity and supply chain traceability.

Lack of data and regulation

The report highlights severe data gaps, noting that reliable information on gold imports, sales, and purity is unavailable. This lack of documentation has prevented effective policymaking and oversight.

The CCP also criticizes the complex tax structure on gold transactions, saying it encourages smuggling, under-invoicing, and off-the-books trading.

“There is no comprehensive regulation to oversee the gold market,” the report states, stressing that the market remains fragmented, opaque, and vulnerable to illegal financial flows.

Reko Diq Project expected to reshape supply chain

The study underscores the need for urgent reform ahead of the commercial launch of the Reko Diq Gold Project, which is expected to extract gold worth approximately $74 billion over a 37-year period.

The CCP says the project could transform Pakistan’s gold supply chain—but only if the market is documented and regulated beforehand.

To address these systemic issues, the CCP has recommended a series of structural reforms:

Establishing a Pakistan Gold and Gemstone Authority
Introducing gold licensing, and tightening rules on imports and anti–money laundering compliance
Mandating quality testing and grading for all gold products
Linking all gold buying and selling to the FBR track-and-trace system
Creating a gold bank system, modeled after Turkey, to stabilize trade and liquidity
Implementing clear regulations before the Reko Diq project becomes commercially operational

The CCP says these steps are essential to bring transparency, accountability, and global competitiveness to Pakistan’s gold market.