Price Of Gold Skyrockets In Burma

Vendors arrange a display of gold jewelry at a shop in Chinatown in downtown Rangoon.

The price of gold has skyrocketed in Rangoon this month from 765,000 kyat (US $884) a tical (0.58 oz), to a high of 794,000 kyat ($918) per tical by Sept. 14., the highest price ever on gold markets in Burma, the equivalent of $1,588 per ounce.

The current price (Sept. 20) has leveled off at 784,000 kyat per tical, the equivalent of $1,568 per ounce, which is still somewhat short of the international price of $1,770.

Gold dealers in Rangoon told The Irrawaddy that demand is “almost dead†as a result of the inflated prices, and people have been more interested in selling gold products back to dealers than buying new ones.

Nonetheless, most speculators say they believe that the price of gold will continue to increase in Rangoon in Mandalay until the end of the year.

“If the prediction of economic experts in Western countries is correct, the price of gold will not go back down to the level it was last month. The general public are taking the opportunity of selling their jewelry at these high prices on the basis that they can buy back when the prices go down again. In fact, the price will not be going down any time soon,†said one gold dealer in the former Burmese capital.

Some gold dealers have suggested that the economic crisis in the West has driven traders to invest in gold while the dollar is weak—it decreased again this month, from 860 kyat to 850 kyat.

Significantly in Burma, very few couples traditionally get married between the months of July and October because of Buddhist Lent. The season for getting married is considered to begin after the full moon of October. Therefore, the demand for gold rings, etc, will be higher at this time, and gold prices would be expected to peak.