Local gold prices expected to extend their drop on weak global cues

With gold prices sliding in the global market, the price of the yellow metal in the domestic market is likely to continue falling, according to gold traders.

“Global gold price has dipped. The local currency is gaining against the dollar in the internal forex market. Gold price is expected to extend its drop this month,” said U Myo Myint, chair of the Yangon Region Gold Entrepreneurs Association.

In early September, the price of pure gold crossed K1.3 million per tical (0.578 ounces, or 0.016 kilograms) in the domestic market, tracking global cues and rumors in the local banking industry. Then, it dropped to K1.175 million on 2 December.

“Despite the price drop, regular trading is being witnessed in the domestic market. About 50 viss (a viss equals 1.6 kg) of gold is being traded daily,” U Myo Myint added.

The domestic gold price is positively related to the global gold price. Global prices were pegged at over US$1,459 per ounce on 2 December and the US dollar exchange rate stood at K1,514, according to the gold market. With global gold prices on the uptick, the domestic price hit fresh highs this year, reaching K1,000,000 per tical between 17 January and 21 February, crossing K1,100,000 (22 June to 7 August), climbing to 1,200,000 (7 August-4 September), and then reaching a fresh peak of K1,300,000 on 5 September.

According to gold traders, the lowest price for gold in June was K1,223,800 (14 September) and the highest was K1,307,000 (5 September). In October, the gold price touched the lowest level of K1,211,500 on 1 October and the highest level of K1,229,000 on 10 October. In November, the price moved in the range of 1,219,400 (2 November) and K1,173,000 (28 November), according to gold traders. — Nyein Nyein (Translated by Ei Myat Mon)