Jewellery prices don't match with world market

Prices of jewellery did not decline at the expected rate despite a fall of about $188 in gold prices per ounce

on the global market.

Businesspeople had hiked jewellery prices several times, keeping pace with an international price hike.
This allowed local jewellers to sell gold ornaments at a rate, which is Tk 6,000 and Tk 7,000 higher than the current international rate per bhori.
The finest (24-carat) of gold traded at $792.59 per ounce (2.67 bhori or 31.1 gram) on the global market yesterday, down from a new high of $981 recorded on July 16.
Soaring gold prices on the international market prompted jewellers in Bangladesh to hike the prices of 22-carat gold by about Tk 1,000 to Tk 27,700 and 21-carat gold to Tk 26,535 per bhori.
The prices of gold have declined by Tk 4,788 per bhori on the global market, but Bangladesh Jewellery Association (BJA) has decreased gold prices by only Tk 1,400 per bhori.
BJA centrally selects gold prices for its members to follow.
BJA President MA Wadud Khan said: "Although it is necessary to decrease gold prices, we cannot do so overnight as we will have to think of our business interest first."
"If we decrease gold prices abruptly, the customers who have already placed orders at high rates, will cancel their orders," Khan said.
A quick decline will hurt the jewellery business, Khan feared.
"The association will decrease gold prices by a further Tk 1,000 per bhori soon," he promised.
"Local gold prices should be lower than the global rate since the bulk supply of gold on the domestic market comes not from the international market but from recycling of local reserves of gold," said a bullion businessman, asking not to be named.
Jewellers get recycled gold from people who sell their ornaments to jewellery shops, the businessman said.
"Since supply comes from the domestic market gold prices were lower than global prices a year ago," he added.
Wadud Khan, president of BJA, differed.
“We get almost 80 percent of our required gold from recycling but that doesn't mean local prices of gold should be lower than the international rate," he said.
"If the prices of precious metals remain lower in the country than in other countries, gold jewellery will be smuggled out,” said the president of BJA that has around 1,000 members in Dhaka and another 120 outside.
The size of the domestic gold market has eroded to 25 tonnes from the previous 50 tonnes due to a price hike, according to bullion businessmen.
About one million people are directly or indirectly linked to the business, said Dewan Aminul Islam, joint secretary of BJA and owner of Seeraj Jewellers.