Gold losing its shine on the back of relentless price rise

Staff Correspondent: Gold has a special place in people’s lives not only as an ornamental commodity, but also as a valuable resource and store of value. It’s worth therefore extends from the individual to the state level.
No matter how expensive the paper currency is, its foundation of trust is shaky. People prefer buying gold regarding it as a valuable asset for the future.
Investing in gold is reliable. So everyone wants to save it as an asset. In countries of the region, including Bangladesh, gold has become an ‘essential’ commodity at the time of marriage.
Of course, the rich are forced to go to the gold shops to protect their social status. But year after year the rise in gold prices has reduced the number of buyers going to the store. Middle-class and low-income families are under great pressure to maintain social norms.
The quantity of a bhori (11.66 gram) of 22 carat gold that could be bought for Tk150 in 1971, now costs more than Tk73,000. A first-class government official can no longer afford to buy even half a bhori of gold with a full month’s salary.
In 1972, the year after independence, the price of gold was Tk160 per bhori. Since then, the price of gold has increased by almost 460 times in the last 50 years.
At present, 22 carat gold is being sold at a price of Tk 73,458 per bhori, 21 carat gold is being sold at Tk 70,309 per bhori, 18 carat gold is being sold at Tk61,564 per bhori. The fixed price of gold per bhori as per traditional method is Tk 50895.
In the last one year, the price of gold in the country has increased by several times adjusting with the global market rate, said Dilip Kumar Agarwala, General Secretary, Bangladesh Jewellers Samity (BJS).
He said the gold price has increased like other things and Bangladesh has no gold mine, all of the demand for this valuable matter is being met by importing. Agarwala also acknowledged that people of fixed income group are shifting
their choice from gold due to the higher price, or buying less.

Even in 2008, the price of gold in Bangladesh was limited to Tk 25,000 per bhori. Now its price has jumped to Tk73458. Over the last 11 years or so, gold prices almost tripled. As a result, there is a natural pressure on the buyers. Vendors say their sales have dropped to one-third. The use of gold as an ornament has decreased. People are no longer giving gold ornaments as gifts to their loved ones at weddings, birthdays or any other occasion.

Some families are suffering from a financial crisis to meet the demand for gold for weddings. Even though taking dowry is prohibited, girls still have to be ‘arranged’ by their daughters in marriage.

In many cases, the value of the bride in the family depends on the weight of the gold jewelry taken from the father’s house, said Tahmina, a resident of Rampura area, who went to Bashundhara City of the capital to buy gold jewelry.

She said her eldest daughter was getting married. For this she went to Bashundhara to buy necklaces, earrings and nose rings. The boy’s side gave the ring. She didn’t have to buy bangles anymore because she made a new bangle for her daughter with the ones given from her father’s house during her own marriage. She has to spend over Tk 2.3 lakh for three pieces of jewelry.

Tahmina said, “If the price of gold was not so high, I would not have broken a pair of old bangles. But it will cost Tk90,000 to buy two gold bangles. If you give a bangle that weighs less, it will feel absolutely insulting.”

Mentioning that she has to marry off two more daughters, Tahmina said, “I gave my bangle (churi) to the elder daughter. There is nothing to give to the little ones. Then you have to buy it.”

Kazi Saiful Islam, a resident of Banasree, who went to Baitul Mokaram area to buy gold, said it is becoming difficult to maintain the traditions with such a high price of gold.

Md. Aminul Islam, owner of Srity Jewellers at Baitul Mukarram, thinks that no one wants to buy gold unless they are forced to do so now due to rising prices.

He said, “No one is giving gold as a gift now. Instead, the value of crockery items, sarees, etc. has increased. And many also give cash gifts.”

Giving a gift of Tk 5,000 in cash seems like a lot. But not a single ring is available for Tk 5,000 now. A search of jewelry shops in Dhaka revealed that the minimum price of a ring is Tk 9,000. A necklace is available for a minimum of Tk 17,000. It will cost at least Tk18,000 to buy earrings. It will cost Tk70,000 to buy a pair of bangles. Noserings will be available starting from Tk2,500 to Tk30,000.

However, shop owners said jewellery made with a small amount of gold is not good for wearing. Most of the limited income group people buy rings for Tk14,000 to Tk 15,000, necklaces for Tk20,000 to 25,000, earrings for Tk 15,000 to Tk20,000, bangles for Tk 70,000 to Tk 80,000, nose rings for Tk 3000. One has to spend around Tk 2 lakh to buy five types of standard ornaments.