The price of pure gold remains high at around K3.1 million per tical (0.578 ounce or 0.016 kilogramme) in the unofficial domestic market on 3 May as the spot gold price rallied at $1,961 per ounce and Kyat against greenback depreciates at K2,960 in the grey market. Consequently, YGEA hiked the reference rate to over K2,310,000 per tical. There is a large price difference of over K700,000 per tical between the YGEA’s reference price and the price in the unofficial market. YGEA calculated the price depending on the Central Bank of Myanmar’s reference exchange rate of K2,100, with some addition, while the US dollar is exchanged at K2,960 in the unofficial forex market.
The US dollar exchange rate weighs on domestic gold prices. The YGEA requested sellers to make gold transactions below K2.9 million per tical on 27 April when the gap between the reference price and the market price is wide. Following the bankruptcy of the US bank in early March, the gold price soared. Despite the gold gain in the global market, Myanmar’s forex market sees no movement at all. Consequently, YGEA requested its members not to buy them competitively, tracking the upward trend in the gold spot price, as per YGEA’s statement released on 20 March. Afterwards, the YGEA called for the members to make gold transactions with only immediate payment and avoid verbal transactions over calls without having any physical stocks.
The YGEA is not bound to have any responsibilities for market manipulation in the unofficial market. As a result of this, its members are asked to strictly adhere to the rules and regulations of the association while making gold transactions. At present, the authorities concerned are attempting to deal with market abuse and inspecting and prosecuting market manipulation is being undertaken.
Moreover, the Central Bank of Myanmar will inspect those manipulators who interfere with market stability through digital platforms, according to the notification dated 20 March. The soaring dollar exchanging at over K4,500 drove the pure gold price up to a record-high of K3.7 million per tical in late August 2022. For the gold price to decline, the Ministry of Natural Resources and Environmental Conservation has been selling gold ingots under the competitive bidding system in Yangon, Mandalay and Nay Pyi Taw. With an aim at reducing gold prices, the YGEA and Mandalay Region Gold Entrepreneurs Association sold gold bullion supplied by the executive members and the members as well.
Source: The Global New Light of Myanmar