The continued devaluation of gold abroad has led to a 14.73 percent drop on the local markets over the past year, shop owners said.
The current market price of one tical of 24 karat gold (one tical equals 0.576 ounces) now sits at K648,000 (equivalent to US$1133 an ounce), down from the K760,000 gold sold for in January 2013, owners said.
The price of gold in Myanmar is affected by the exchange rate as well as the precious commodity’s performance on the international markets. In New York, the price for gold rose to a five-year high of nearly $1700 in January 2013, but as of January 2 it was trading at just $1216 per ounce.
“When the international price was up, the local price didn’t follow very quickly because local gold can’t be imported legally,” said U Zaw Aung, adding that smuggling leads to a lag time between changes in the global market and local adjustments in price.
Prices have continued to fall despite having hit a five-year low last month when one tical sold for K653,500 (equivalent to about US$1228 an ounce), an official from the Myanmar Gold Entrepreneurs’ Association (MGEA) said.
In 2013, international gold prices were shaken by political tensions between the United States and Sierra Leone, leading to price volatility in August that pegged gold trading between $1300 to $1400 per ounce.
“That’s why international gold price was down. Local gold prices are directly connected with international gold prices,” said U Zaw Aung, owner of Taik Sein gold shop in Yangon, adding that although local gold prices fell quickly in 2013, the local wholesale and retail market for gold and jewellery remained healthy.
A strong global stock market performance also meant interest in gold was low this year, driving prices down, owners said.
In 2012, local gold prices stayed above K700,000 consistently, with a high of K793,000 reported in August 2012.
Source: Myanmar Times