Bangladesh Jewellers Association (BJA) decided Monday to increase the price of 22-carat gold ornaments by around Tk 600 per bhori (11.664 gram approximately) to about Tk 13,800 from tomorrow (Wednesday).
The association sources said the price hike would make a record in Bangladesh since such a big push had never happened within a short span of time. BJA fixed its price at Tk 13,200 per bhori on December 1. One bhori of 22 carat gold was selling at Tk 10,905 on January 5.
"We are compelled to raise the price of our jewelleries," said MA Oadud Khan, president of the BJA, citing example of international gold price, which was traded at US $ 534 per ounce at the major gold markets Monday.
Some other jewellers have, however, said the price hike would be unlawful and unethical since most of the jewellers do not sell 22-carat gold ornaments.
Until Monday, 24-carat or pure gold was selling at Tk 12,600 (a bhori) and when someone makes an ornament, the jewellers add alloy, which diminishes the purity of gold. Therefore, one bhori of ornament made of 22-carat gold should rather be selling at Tk 11,020, argued those jewellers.
"When you buy gold they are giving you 22-carat but charging very high prices. Again when you sell them back they will deduct 20 per cent commission. So you are, in fact, being deceived twice," said Aftab Ahmed Khan, owner of Guinea Exchange Jewellers, at the city's Bangabandhu avenue.
Khan said most of the jewellers were not complying with the government rules and that they were selling low quality ornaments putting 22-carat marks on them. He said Bangladesh Standard and Testing Institute does not check the quality of ornaments, though it is their responsibility.
Many in the BJA argued that they had to make an upward price adjustment of the jewelleries immediately, otherwise the precious metal would be smuggled out.
24-carat gold bars were traded at US $ 520 at major gold markets in the world Thursday.
Hearing the news of price hike, may rushed to the city's Baitul Mukarram Market, a hub for gold jewelry. But a jeweller at the market said demand of ornaments declined since the prices went up during the first week of December.
International market analysts said China, India, Japan were buying gold and investors in the West were also putting their money in gold business, pushing its prices further up.
According to a Canadian report, major gold mining companies have started merging to stay afloat. Last week, Goldcorp Inc. took over a property from Virginia Gold Mines Inc., Iamgold Corp. said it is acquiring Gallery Gold Ltd. and, Yamana Gold Inc. said it is buying RNC Gold Inc.
The market doesn't expect it to end there, but as Desjardins Securities noted last week, a lack of cash in the sector means that most of these acquisitions will be funded with shares, said the report published in the National Post, Monday.