Two days ago, the price of gold again increased in Bangladesh. The best quality 22 carat gold in the market now costs Tk 78,265. The price of gold increased by Tk 3,265 this time.
Bangladesh Jewelers Association Bajus has fixed this price on March 3rd. Last month itself, the price was increased by Tk 1,867. But just three months ago, the price of gold fell. The price of gold fluctuates frequently. How is the price of gold determined?
Crisis and lack of confidence in the dollar
The Ukraine-Russia war is said to be the reason for the rise in gold prices this time. Any kind of global crisis affects the price of gold, be it a war or an epidemic, said Dilip Agarwal, general secretary of the Bangladesh Jewelry Association.
Explaining how the crisis affects the price of gold, he says, “Whenever people lose confidence in the dollar, they turn to gold. Despite all the recent wars, in Iran, Iraq, Libya, and even the economic wars between China and America, gold is still in the international market. Rates have gone up. But now the whole of Europe is turning to gold. That’s why the price of gold goes up when there’s a crisis.”
He says that the point is that the fall in the price of the dollar in the international market has an impact on the gold market. When various central banks buy more gold during crises, its price rises.
Crude oil and gold
Mr. Crude oil and gold are inextricably linked, Agarwal explains. As dollars are kept in the central banks of various countries, gold is also stored.
Gold is a commodity but is also widely used in payment. Even if the price of oil goes up, the price of gold goes up. And vice versa. Crude oil is often paid in gold when there is currency volatility.
Crude oil-producing countries want it when they are worried about the dollar falling ahead. When the price of oil increases, the price of goods increases. As a result, panicked hoarding of gold increases, which in turn drives up prices.
Who keeps the gold in the Bangladesh Bank vault?
How profitable is buying gold as an investment?
How much is it possible to legally import gold with a license?
If you store gold, the price increases?
A family in Bangladesh or a country’s central bank tends to hoard gold at various levels.
Dhaka University economics professor Saima Haque says this is an investment that if bought and held, there is no risk of major losses.
“To give an example, during the coronavirus pandemic when many businesses were collapsing, there was a kind of uncertainty in investment. When any kind of disaster or uncertainty is created, when an economy weakens, people tend to put money into investments that they feel are safer than investing in other sectors. Wants. In this case, the tendency to choose gold is very high. Because gold is relatively safe.”
Because the stock market, bond, and currency values are usually the first to be affected by any crisis. As in the stock market, prices can suddenly collapse, but not so in the case of gold. Then gold became a friend of danger, said Saima Haque.
Gold is not depleting like oil and gas. It goes through many hands and finally stays on earth. So gold has stability. On the other hand, there is only a certain amount of gold reserves in the world. Generally, the price of any product in the market is determined based on the demand and supply of that product. Consumer behavior often has more to do with the price of gold than its supply.
Why is the price of the dollar rising? Who benefits and who loses?
A rape incident and Bangladesh’s gold policy
How is the gold market going without imports?
People tend to buy gold when the economy is in trouble. The value of money cannot be retained, so it is considered profitable to buy gold as its value tends to increase rather than decrease.
Says Saima Haque, “But investing and storing gold in times of danger increases its value.”
Gold price in the Bangladesh market
Whenever a crisis, dollar value, oil price, inflation, inflation, increase the price of gold in the international market, its price also increases in Bangladesh.
Dilip Aggarwal says, “A jeweler’s product is jewelry, whose raw material is bought from bullion dealers. They follow international market rates.”
But most of the gold sold in the Bangladeshi market is allegedly smuggled. The government does not get any money from this gold.
In that case, many people raise questions about how the price of gold is determined in the Bangladeshi market.