Gold prices hit fresh high

Wednesday, 23 June 2010 12:18 Salai Han Thar San

New Delhi (Mizzima) – The price of gold on the Burmese market hit a fresh high today, at 658,000 Kyats (around US$658) per tical (one tical equals 15 grams), after last month’s record of 641,000 Kyats, according to traders in Rangoon.

The trend though was not unique to Burma, the traders said.

“The main reason is the increase of gold prices in the global market,” a gold shop owner on 29th Street in Pabedan Township, Rangoon said. “So the Burmese gold market has shown sharp fluctuations as well.”

Prices in the global market normally set trends on the domestic front. The precious metal is heading for its 10th straight annual increase, the longest run since 1920.

Although in recent months gold fell 12.6 per cent from December to February and rebounded 16 per cent in the three months that followed, the price of gold in the Burmese market has been on a steady incline since the beginning of this month. But it shot up in the third week of June from 645,000 Kyats to 658,000.

The current world gold price is US$1,260 per ounce. Over the past two and a half months, gold prices worldwide have advanced more than 10 per cent. In the past three years, gold has gone up 84 per cent – nearly 30 per cent within the past year alone.

As the price of gold in Burma rises, sales in rural areas has decreased.

“There are just a few buyers from rural area,” said a gold merchant on 22nd Street in Latha Township, Rangoon. “Anyway, we are not eager to sell gold because the price has continuously increased, so it’s no problem to hold it.”

One explanation for the abrupt climb in gold prices is the steady devaluation of the US dollar. Gold is priced in the United States currency so the price of gold tends to rise as the currency falls. Last month the exchange rate for the dollar was 990 Kyats in Burma. It declined to 982 Kyats on Monday.

Gold merchants, most of whom are located on 29th Street, are required to abide by the prices set by the Gold Traders’ Association on Shwebonthar Road in Pabedan Township, which was formed by the Ministry of Home Affairs in 2002.