Why gold prices fluctuate

Both local and international factors contribute to the frequent fluctuations in gold prices in Bangladesh. On the global front, market trends, exchange rates, and geopolitical uncertainty all play a role in influencing gold prices. Since gold is traded in US dollars, changes in the value of the dollar have an immediate impact on gold prices.

Domestically, the demand-supply imbalance is a major factor. Demand for gold typically rises during wedding seasons and holidays, which often drives up prices. Conversely, slower demand tends to stabilise prices. The Bangladesh Jewellers' Association (BAJUS) frequently adjusts prices to reflect changes in both local and global markets.

Taxes and import expenses also have a significant impact on pricing. Bangladesh's reliance on imported gold means that any changes in import taxes or international transport costs have an immediate effect on the local market.

This volatility is further fuelled by fluctuations in the economy, inflation, and the investment behaviour of individuals, making gold prices susceptible to a wide range of factors.

Tahmina Rahman Hafsa

Student, Bachelor of Business Administration

North South University

hafsa060511@gmail.com