Gold Prices Again Reach Record High
By Kyaw Hsu Mon 8 September 2016
RANGOON — Both Burma’s recent gold prices and the US dollar exchange rate have recently risen, and industry observers predict it will continue to increase.
On Sept. 7, gold reached a record high of 872,000 kyats (US$714) per tical, a traditional Burmese weight measurement of 16.33 grams (or just over half of an ounce), an increase from 840,000 kyats ($688) during the previous week.
“It was the highest record in the gold market, because global gold prices jumped at least $20 per ounce this week,” said U Kyaw Win, chairman of Myanmar Gold Entrepreneurs Association.
As of Sept. 8, the global gold price had reached US$1,346 per ounce, up from US$1,320 per ounce last week.
“Dollar exchange rates and gold prices are directly impacting the market. As long as the global gold price is increasing, the local price will follow,” U Kyaw Win said.
U Kyaw Win said that although the gold price had reached a record high, the market had not been harmed, and demand remained stable.
“I’m not concerned for the local market…the demand is still good,” he said.
After a sharp increase in 2012 when the global prices reached arpund $1,900 per ounce, the local price floated at around 680,000 kyats per tical until late May of this year; it has since increased each month.
On Sept. 8, the local gold price decreased slightly to 867,500 kyats per tical, while the US dollar exchange rate reached 1,215 kyats per dollar.
“The dollar exchange rate is still increasing from 1,190 kyats per dollar last week to 1,215 kyats this week,” a currency exchange specialist in Rangoon said on Thursday.
However, economist U Khin Maung Nyo pointed out that the rising gold price would be able to compensate for the country’s recent high inflation rate, limiting the effect on small businesses.
“At least, this high gold price can cover for the high inflation rate. Now the inflation rate has reached 12.12 percent, but it’s not worrying,” he said.
“Exporters will be happy while importers will not be…customers will suffer from the high commodity prices,” he said.
Burma’s Central Bank publicized an inflation rate of 12.14 percent in late August, surpassing the predictions of the World Bank and worrying business leaders that inflation in the country could be on an upward spiral, dampening local demand for goods. As of Sept. 8, the Central Bank said that the inflation rate was 12.12 percent.