Gold market gloomy on high prices
Thursday, 11 October 2007
High gold price continuing for the last 28 years globally has cast a pall of gloom over the local market ahead of the festive season, dampening the demand of the precious metal, reports bdnews24.com.
The purchasing capacity of the potential buyers of gold getting increasingly weaker.
Gold heated up to touch $747.75 per ounce a week ago, the highest in 28 years, before it fell to $729.70 per ounce this week.
Local traders said, a 'bhori' (11.66 grams) of gold costs about Tk 19,000 on the basis of the international market price at $742 per ounce. Gold prices in local market have hit a new high with guinea (21-carat) selling at about Tk 20,000 and 22-carat at Tk 21,000 a bhori.
"People's purchasing capacity is always diminishing. The huge hike in its price has further dented the market despite the approach of the festive season like Eid," Bangladesh Jewellery Manufacturers and Exporters Association (BJMEA) President Anwar Hossain said Wednesday.
Hossain said, winter is the prime time for gold demand in Bangladesh, but Eid is another peak season for the gold traders with scores of marriages taking place.
According to a BJMEA study, gold consumption, which was about 50 tonnes per year until 2003, has come down to 15 tonnes now. Traders said, surging international prices, fuelled by a weakening dollar and oil turmoil, have led to dull business in the last few years on the domestic gold market.
"Affluent and fashion-lovers are also not coming to buy gold for the Eid festival," Gulzar Ahmed of Apon Jewellers said.
Bangladesh does not import gold, and the traders depend on recycling. Earlier, the local traders used to buy gold from people who would frequently go abroad, and were allowed to bring 10-kg of gold paying duties - Tk 125 a bhori.
"People no more bring gold now, because a person needs Tk 16 million to import 10-kg gold," the BJMEA chief said. "A shrunk market has been a turn-off for them."
Silver too continued to reel under pressure in line with gold prices, traders said. One bhori of silver now costs about Tk 500 in the local market.
According to BJMEA, the country has about 5,000 jewellery shops selling ready-made ornaments, and about 10,000 shops that make ornaments according to customers' choice.
The jewellery industry currently employs 1.5 million people, down from 2.0 million in 2002-03 due to volatile domestic market.
The purchasing capacity of the potential buyers of gold getting increasingly weaker.
Gold heated up to touch $747.75 per ounce a week ago, the highest in 28 years, before it fell to $729.70 per ounce this week.
Local traders said, a 'bhori' (11.66 grams) of gold costs about Tk 19,000 on the basis of the international market price at $742 per ounce. Gold prices in local market have hit a new high with guinea (21-carat) selling at about Tk 20,000 and 22-carat at Tk 21,000 a bhori.
"People's purchasing capacity is always diminishing. The huge hike in its price has further dented the market despite the approach of the festive season like Eid," Bangladesh Jewellery Manufacturers and Exporters Association (BJMEA) President Anwar Hossain said Wednesday.
Hossain said, winter is the prime time for gold demand in Bangladesh, but Eid is another peak season for the gold traders with scores of marriages taking place.
According to a BJMEA study, gold consumption, which was about 50 tonnes per year until 2003, has come down to 15 tonnes now. Traders said, surging international prices, fuelled by a weakening dollar and oil turmoil, have led to dull business in the last few years on the domestic gold market.
"Affluent and fashion-lovers are also not coming to buy gold for the Eid festival," Gulzar Ahmed of Apon Jewellers said.
Bangladesh does not import gold, and the traders depend on recycling. Earlier, the local traders used to buy gold from people who would frequently go abroad, and were allowed to bring 10-kg of gold paying duties - Tk 125 a bhori.
"People no more bring gold now, because a person needs Tk 16 million to import 10-kg gold," the BJMEA chief said. "A shrunk market has been a turn-off for them."
Silver too continued to reel under pressure in line with gold prices, traders said. One bhori of silver now costs about Tk 500 in the local market.
According to BJMEA, the country has about 5,000 jewellery shops selling ready-made ornaments, and about 10,000 shops that make ornaments according to customers' choice.
The jewellery industry currently employs 1.5 million people, down from 2.0 million in 2002-03 due to volatile domestic market.