TDS Desk:

The soaring price of gold in the global market is having a direct impact on Bangladesh, with domestic gold prices reaching record highs.

As the surge continues, many are speculating whether the price per bhori will surpass Tk 2 lakh in the near future.

According to the latest figures from the global spot market, gold prices have reached an all-time high of $2,800 per ounce (2.43 bhori). In line with this trend, the price of 22-carat gold in Bangladesh now stands at Tk 144,890 per bhori, the highest in the country’s history.

A SHARP RISE OVER THE YEARS

Data from the Bangladesh Jewellers’ Association (Bajus) shows that the price of 22-carat gold was only Tk 6,900 per bhori that in 2000. By 2010, this figure had risen to Tk 42,165. A decade later, in 2020, the price climbed further to Tk 69,867 per bhori.

In the past 15 years, gold prices in Bangladesh have increased by Tk 137,000 per bhori. Notably, in the four years since the COVID-19 pandemic, prices have surged by Tk 75,000.

In July 2023, gold prices in the country surpassed Tk 1 lakh per bhori for the first time, and within 18 months, they have risen by nearly Tk 45,000.

Given the current rate of increase, analysts predict that by the end of 2026, gold prices could approach Tk 2 lakh per bhori.

MARKET EXPERTS WEIGH IN

Veteran gold trader Govinda Haldar, who has been in the business for five decades at Dhaka’s Tanti Bazar, recalled that before Bangladesh’s independence, the price of a guinea gold coin was Tk 150.

While this may seem negligible on Sunday, it was considered expensive at the time. He believes that if the current trend persists, gold prices could reach Tk 2 lakh per bhori within a year.

However, Bajus Price Determination and Monitoring Committee Chairman Masudur Rahman cautions that it is difficult to predict whether prices will reach Tk 2 lakh by 2026.

“The way global demand is increasing and central banks are stockpiling gold, it wouldn’t be surprising if the price does hit Tk 2 lakh. However, it all depends on market dynamics,” he said.

In 2024 alone, Bangladesh adjusted gold prices 62 times, with 35 increases and 27 reductions. So far this year, four price adjustments have already been made, pushing the price of this precious metal to new heights.

GLOBAL DEMAND DRIVING PRICES

A report by the World Gold Council highlights that since 1971, gold prices have increased by an average of 8% per year in dollar terms. This steady rise, combined with gold’s ease of conversion into currency, continues to drive demand.

Global gold demand now stands at 3,034 tonnes annually, valued at $233 billion. While gold is primarily used for jewellery in South Asia, many countries view it as a key investment asset.

Approximately 40% of the world’s gold is held for investment, compared to 33% used for jewellery. Central banks hold 20% of the world’s gold reserves, and 7% is used in technology sectors, such as chip manufacturing.

GOLD RESERVES IN BANGLADESH

Despite the availability of global gold reserve data, there is no official record of private gold holdings in Bangladesh. In contrast, India maintains an official estimate of gold holdings among its citizens, acknowledging gold as a major investment tool.

Masudur Rahman of Bajus noted that Bangladesh lacks similar data. “India has recognised gold as an investment vehicle, and the state itself has encouraged people to hold gold. But in Bangladesh, we do not have any government statistics on private gold holdings,” he said.

CHALLENGES AND CHANGING ATTITUDES

The increasing price of gold has altered traditional gifting practices.

Hasibur Rahman, a corporate executive, remarked, “There was a time when gifting gold jewellery at family events was a common practice, considering it a future savings. But as prices soared, this custom has largely faded. Now, people prefer giving cash instead of jewellery.”

On the other hand, private sector employee Rumman Rubayet pointed out that many prefer the safety of bank deposits over gold investments. “Keeping money in the bank and earning profit is largely risk-free. Although gold prices are rising now, their future is uncertain. That’s why people prefer bank savings over gold investments.”

However, Masudur Rahman believes that awareness about gold as an investment option needs to improve. Drawing parallels with the stock market, he said, “Millions invest in the stock market despite its risks. Historically, gold investors have rarely faced losses. If people start viewing gold as an investment rather than just jewellery, demand will remain strong regardless of price fluctuations.”

Addressing issues related to VAT and tax regulations and promoting gold investment awareness could help sustain demand in Bangladesh.

Industry insiders believe that, as global gold prices continue their upward trajectory, Bangladesh’s market will follow suit. While Tk 2 lakh per bhori may seem high today, history suggests that demand for gold is unlikely to diminish anytime soon.