<i>Gold market gloomy for sudden price hike</i>

Photo: STAR

Despite the festivities of Eid and Puja, gold witnessed a dull spell of sales following a sharp rise in prices.
According to jewellers, sale of gold is down by about a third of its normal average daily sales.
The recent increase of gold price by Tk 500 each 'bhori' (11.66 grams) is highest in 28 years. Geopolitical tensions are believed to be the main reason behind the price hike, said industry experts.
Even though this time of the year -- October through December -- is considered to be the peak season for the sale of gold with major festivities including Eid, Puja and weddings, the flow of customers has thinned out dramatically, jewellers at different markets said.
Be it the showrooms with sparkly glass cases and dazzling lightings in posh areas or the tiny and shoddier ones in old parts of the city, most of these jewellery stores are almost deserted, they added.
Alamgir Khokon, owner of New Chandni Jewellers in New Market, said, "The market of gold has been really bad lately,"
"This time of the year is supposed to be our peak sales season with all the festivals and weddings, but customer response this year has been below 50 percent than that of last year," he added.
"Especially for the Eid and Puja, we undertook lavish preparations with exciting offers and new collections to attract customers. But sales were not upto our expectation," said Jamil Hasan of Nova Jewellers in the Baitul Mukarram Market of the city.
"Frankly, I cannot really blame the customers. With the rise in prices of almost everything, people are buying fewer luxury items these days. It was especially true after the recent price hike on the international gold market," he added.
Prospective shoppers, unaware of the recent price hike, were found baffled as they were shopping around for gold ornaments at jewellery stores in the city recently.
"The same type of jewellery that I had purchased for Tk 20 thousand only a month back is now selling at around Tk 23 thousand," said Ishrat Jahan, a prospective gold shopper at Mouchak Market at the city.
"Although I came here to buy a gold ring for my friend's birthday, now it seems as if the prices have gone beyond my purchase capacity," she added.
The recent price increase came into effect after Bangladesh Jewellery Makers and Importers' Association (BJMIA) reviewed the gold price on September 27.
According to the new rate, each bhori of 18-carat gold -- which was selling at Tk 17,400 a few weeks ago -- has now been fixed at Tk 18,080. (24-carat gold is considered to be pure gold; 12-carat being 50 percent pure)
Each bhori of 21-carat gold is now being sold at Tk 20, 237. The previous price of it was Tk 19,715.
A bhori of 22-carat gold has jumped from Tk 20,646 to Tk 21,228.
People mostly from the lower and lower-middle income groups now find themselves unable to afford gold ornaments these days.
"The way jewelry prices are rising, ornaments made of inexpensive materials are gaining more popularity these days," said Golam Hussain of Venus Jewellers in Mouchak Market.
Baitul Mukarram jewelry market, a market that is usually found crammed with customers during festivals, was found literally deserted when this correspondent visited it before the Eid-ul-Fitr.
Jewellers, however, were optimistic that sales would pick up during the coming months of Agrahayan and Falgun, which are considered as the season of wedding in our country.
Apart from the price hike, a number of jewellers in Bailtul Mukarram Market also blamed the market authorities for the decline in sales.
"The already inadequate parking facilities in the (Bailtul Mukarram) market are virtually taken over by street vendors and hustlers. How can you expect that the affluent customers would come here without being able to park their cars?" said Kazi Nurul Huq of Venus Jewellers.
A number of jewellers pointed out another reason for the decline in gold sales.
An official of Apan Jewellers said, "With more and more muggings and robberies in the city, people are more worried about their safety these days. They are really scared to carry expensive items and large amounts of cash on them."
"People do not bother to make any lavish purchase lately to deter the crooks or even the 'authorities'," he added.
Since the price of gold in Bangladesh is lower than that in neighbouring countries, huge amounts of gold are being smuggled out to India, Pakistan and Myanmar, according to sources at Bangladesh Jewellery Makers' and Exporters' Association (BJMEA).
There are large numbers of shady businesses operating in our neighbouring countries where gold, in place of dollar or other currencies, are being used as a medium of trading. That is one of the main reasons for gold smuggling, said an official from the BJMEA accounts department.
The price hike of gold, although detrimental to the market, would sap the smugglers, he added.