• Wednesday, Sep 30, 2020
  • Last Update : 12:42 pm

Why is gold becoming more expensive?

  • Published at 03:42 pm August 9th, 2020
Gold Ornaments
Photo shows gold ornaments displayed at a jewelry shop Mehedi Hasan/Dhaka Tribune

Gold is considered as an international currency in the global market where central banks of various nations reserve gold and US dollars for business

Although gold jewellery businesses say the demand for gold has fallen amid the coronavirus pandemic, the price of gold, however, continues to rise in the country and across the world.

Gold is considered as an international currency in the global market where central banks of various nations reserve gold and US dollars for business. As the value of the US dollar continues to fall, many countries, including China, have started buying gold as an alternative. This new demand for gold has pushed its prices up in the global market in recent times.

It was found that the price of gold rose up to USD$500 per ounce in the global market. Especially last week, the price of gold rose USD$250 per ounce. The rise in gold prices in the international market also pushed prices up in the local market, although the demand for the precious metal remains low.

Dilip Kumar Agarwala, general secretary of Bangladesh Jewellers Samity (BAJUS), said gold prices in the country are kept in line with the international market rate to limit the chances of gold being smuggled out of the country. 

He also believes that the instability created in the global business market due to the US-China conflict caused the spiralling prices of gold, which might continue to rise up until the US elections are held this year.   

Dilip, however, said gold jewellery businesses were making more profits now due to the rise in gold prices, although the number of customers has gone down. This is because jewellers will make an additional profit of Tk22,000 by selling gold they brought last year when the prices were low. 

On July 23, BAJUS in a statement revised up the prices of gold by Tk2,915 per bhori (11.664 grams) citing a rise in the international market.

As per the statement, 22-carat gold per bhori will now cost Tk72,783, up from Tk69,867. The price of 21-carat gold has been revised up to Tk69,634 while 18-carat gold at Tk60,886.

Amid the Covid-19 pandemic, on June 23, jewellers raised the price of gold by Tk5,825 per bhori, the highest ever increase.

Under the country’s gold import policy,  jewellery business Diamond World became the first entity in Bangladesh to import 11 kilograms of gold legally on June 30.

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