Myanmar’s gold and jewelry sector is in turmoil following the junta’s arrests and investigations of a number of well-known gold dealers and gold shop owners for allegedly manipulating the market amid record prices for the precious metal.
The junta’s probe into alleged market manipulation and the activities of major players comes after the gold price hit a record high of over 5.8 million kyats per tical (16.33 grams) last week, up from 1.3 million kyats before the coup in 2021. On Sunday, the gold price was still over 5.2 million kyats.
“Some greedy traders are intentionally manipulating gold prices through online social media platforms, disrupting the growth of the country’s economy,” the junta said in a statement on Sunday.
It said authorities had arrested 21 gold brokers and merchants in recent days for allegedly engaging in illegal trading to manipulate gold prices.
The regime said information obtained in the detainees’ confessions led to the issuing of arrest warrants for another 10 gold and jewelry shop owners, gold traders and gold refiners, who it said are working “behind the scenes”. Efforts are ongoing to find those who have so far evaded arrest, it added.
Those for whom warrants have been issued include well-known gold shop owners U Aung San Win of Aung Thamadi Gold Shop, U San Win of Zwe Htet Gold Shop, U Aung Kaung Myat of Weint Sein Gold Shop and U Myo Thu Win of Academy Gold Refinery.
Some of them are major rivals of Daw Thet Thet Khine, the junta’s minister for social welfare, relief and resettlement, and the owner of the Shwe Nan Taw Gold and Jewellery shops.
Players in the gold market have raised questions about the fact that Daw Thet Thet Khine, her businesses and her husband U Aung Kyaw Win have all been spared inclusion on the arrest warrant list and are not being accused of what the junta claims are attempts to manipulate the market.
They pointed out that Shwe Nan Taw is among the businesses selling huge amounts of gold at the current market prices, so it seemed strange that it had not attracted the attention of authorities.
“I bought a gold necklace from a Shwe Nan Taw shop in downtown Yangon on May 31 and on that day, the price was around 5.2 million kyats [per tical], but on the receipt [the value of the gold purchased] was recorded as only around 3 million kyats,” said a Yangon resident.
She said the saleswoman told her that despite the lower price indicated on the receipt, the purchaser could return and sell the product back at the current market price at any time.
Indeed, most gold and jewelry shops in Myanmar have adopted the practice of issuing receipts indicating artificially low prices since the junta started probing the market in late May.
Late last month the junta-controlled Central Bank of Myanmar alleged that currency markets, especially dollar-kyat exchanges, were being manipulated. It said fake social media accounts were being used to spread false news on platforms like Facebook and Telegram that had caused the kyat to plunge.
Currency and gold traders have gone into hiding following the reports that the regime had arrested several in Yangon. Whenever exchange rates or gold prices fluctuate wildly, currency and gold traders are often accused of manipulating the market.
The kyat hit a record low against the US dollar on May 30, falling to 5,020 to the greenback, and the price of 24 karat gold hit a new peak of 5.8 million kyats per tical on the same day.
On Monday, gold prices were unstable, moving in a range of 5.1 million to 5.3 million kyats. On the ground, however, all trade has been halted as buyers and sellers adopt a wait-and-see approach.
Most Aung Thamardi, Zwe Htet and Weint Sein gold shops in Yangon, Naypyitaw and Mandalay remained open on Monday despite their owners being sought by the authorities. All 10 of the gold merchants for whom arrest warrants were announced in the latest list were still at large as of Monday evening, according to sources in the gold market.
Businesspeople in not only the gold market but also in other sectors pointed out that the junta has always been prone to such heavy-handed tactics, believing it has the power to bend markets to its will through force, when in fact maintaining stability, especially in financial and related markets, requires careful consideration and a delicate touch.
“Junta ministries lack effective collaboration and capacities to handle these situations. All these bodies, including the Central Bank, are acting in this brainless way, resulting in an ever greater burden falling upon the people and businesses,” said a gold shop owner who is already in hiding, though the junta had yet to issue an arrest warrant for him.
