Local gold price sees small decline due to high exchange rate

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Gold jewellry displayed at a shop in downtown Yangon.  Photo: Phoe Khwar

With a stronger US exchange rate, Myanmar’s gold price showed a small dip compared with the global gold market, which showed a significant decline, according to the Myanmar Gold Entrepreneurs Association (MGEA).
“Previously, the domestic gold price used to be proportionately related to the global gold price. However, the local gold price has not fallen as much as it was expected to. The US dollar appreciating against the kyat might be the reason for a small dip in the local gold market,” said U Ohn Myaing from MGEA. The global gold price was recorded at US$1,255 per ounce last week and it fell to $1,227 per ounce on 18 July. Meanwhile, the domestic gold price was recorded at its highest rate of Ks948,500 per tical (16.4 gm) last week and the price dropped to Ks945,500 per tical on 18 July. “The US Federal Reserve has a plan to hike the interest rate, according to recent reports. The gold price plunged in the international market when the US dollar was appreciating. Nevertheless, that does not remarkably affect the local gold price, as the US exchange rate is increasing in value against the local currency. There is no bumpy ride in Myanmar’s gold market,” said U Kyaw Win, MGEA chair and owner of U Htone Goldsmith and Jewellery shop.
The US dollar exchange rate to the kyat is gradually increasing in value from Ks1,340 to the highest rate of Ks1,426 on 18 July. The local gold market is slow, with instability in the local gold price and the US dollar exchange rate.
Some gold mining businesses have suspended their operations this year. This being so, gold supply was lower than it was in the previous years. However, there is no steep rise in gold price due to low demand in the local market, U Kyaw Win maintained.
Gold trading is usually slow between June and September every year, he continued.
Last year, the global gold price fluctuated on account of instability in the global political climate and the appreciating of the US dollar price. However, the domestic gold price remained on the high side. In September 2017, the global gold price hit $1,348 per ounce and the local gold price also hit a record high of Ks958,000 per tical, triggering a drastic drop in the trading of gold.

 

By May Thet Hnin

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