The price of pure gold has surged above K3.1 million per tical (0.578 ounce or 0.016 kilogramme) in the unofficial domestic market, following the upward trend in spot gold prices and the depreciation of the Kyat against the US dollar. Spot gold prices have reached $1,962 per ounce, and the Kyat has depreciated to K2,970 in the grey market, leading to a rise in gold prices to K3,122,000 per tical in the unofficial market. As a result, the YGEA (Yangon Gold Entrepreneurs Association) has raised the reference rate to over K2,311,400 per tical. There is a significant price difference of over K800,000 per tical between the YGEA’s reference price and the price in the unofficial market. The YGEA calculates the price based on the Central Bank of Myanmar’s reference exchange rate of K2,100, with some additional adjustments, while the US dollar is exchanged at K2,960 in the unauthorized forex market. The exchange rate of the US dollar has a direct impact on domestic gold prices. In instances where the price gap between the reference price and the market price is wide, the YGEA has urged sellers to conduct gold transactions below K2.9 million per tical, as it was on 27 April. Following the bankruptcy of a US bank in early March, the gold price experienced a sharp surge. Despite the global increase in gold prices, Myanmar’s forex market remained stagnant. Consequently, the YGEA released a statement on 20 March, advising its members not to engage in competitive buying while monitoring the upward trend in gold spot prices. Furthermore, the YGEA has instructed its members to only engage in gold transactions with immediate payment and to avoid verbal transactions over phone calls without physical stocks. It should be noted that the YGEA does not bear any responsibility for market manipulation in the unauthorized market. Therefore, its members are required to strictly adhere to the rules and regulations of the association during gold transactions. Currently, the relevant authorities are taking measures to address market abuses, including inspections and prosecutions of market manipulation. In addition, the Central Bank of Myanmar has announced that it will investigate those involved in market manipulation through digital platforms, as stated in the notification dated 20 March. The surging US dollar, which is being exchanged at over K4,500, has pushed the price of pure gold to a record-high of K3.7 million per tical in late August 2022. To curb gold prices, the Ministry of Natural Resources and Environmental Conservation has been selling gold ingots through the competitive bidding system in Yangon, Mandalay, and Nay Pyi Taw. In an effort to reduce gold prices, both the YGEA and the Mandalay Region Gold Entrepreneurs Association have sold gold bullion supplied by their executive members and general members as well. — NN/EM
Gold price surpasses K3.1 mln per tical in shady dealings
- June 14, 2023
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