Gold slides to two-month low

Gold prices in the local market hit a two-month low at Tk 49,555 a bhori as the prices of the precious metal fell in the international market due to a week demand.Bangladesh Jewellers Samity, a platform of jewellery shop owners, brought down the prices on Saturday.In the local market, the price of 22-karat gold dropped 2.29 percent or Tk 1,116 a bhori (11.66 grams) in the last two months, according to the Samity.“The price dropped by more than $50 an ounce (31.1 grams) over the last week in the international market, so we have decided to adjust the prices,” Anwar Hossain, a shop owner and the president of Bangladesh Jewellery Manufacturers and Exporters Association, said on Monday.Over the last two weeks, the price of per ounce of gold fell by $100 to $1,319.11 in the international market, according to Bangladesh Bank data.Gold prices mainly depend on international politics and economic conditions, Hossain said.The wealthy people are purchasing foreign currencies instead of gold to save their money due to political tension across the world, he said. The Syria crisis dominated the international politics, he added.“Besides the easing geopolitical tensions in the Middle East, which are causing the demand for gold as a safe haven to decline, the market appears to be anticipating a reduction in Fed bond purchases next week,” Commerzbank analysts told Financial Times. The low demand for gold jewellery in the local market is another reason for the price adjustment, Hossain said.“Now, people are occasionally buying gold as women prefer diamond jewels better. The demand for gold jewellery has dropped 40-50 percent of late,” he said, adding that some jewellers have folded due to the lacklustre demand.At present, there are nearly 30,000 jewellery shops across the country, including 1,500 in Dhaka, according to the Jewellers Samity. Presently, the annual demand for gold in Bangladesh is around 16 tonnes and the annual market is worth around Tk 7,000 crore.In the international market, the precious metal has fallen 15 percent this year, bringing to an end a decade-long bull run. Reduced demand for ‘safe’ investments and expectations of US monetary shifts, which have triggered a rush out of exchange-traded gold funds, have been the main factors driving the price lower.