HOUSE OF THE WEEK
An abundance of space at FMI City
CERTAINLY, space is not a problem in this house – once you get there. Over the Hlaing River, 45 minutes from downtown, there is a large one-storey house in a big compound waiting for someone ready to trade time for space. ...moreGold ends historic year on a high
GOLD may be immutable, but its price is not. Not in the year 2009, at any rate, which Yangon gold entrepreneurs have dubbed the year of the unstable gold price.
Not that they’re complaining – gold prices have spent most of 2009 edging upwards.
Myanmar gold prices are closely linked to the world price of gold, which hit new heights this year. Though the local price also takes into account local factors, like the cost of production, the weather and seasonal trading, the global price is the main indicator.
And many Myanmar gold holders still seem to live by the old proverb: “Gold is jewellery if we’re rich. If not, we sell it for food”.
“Gold prices reached a new high, both in the world and in Myanmar. As the world price hit US$1220 per ounce, the Myanmar price reached K623,000 per tical,” said one industry observer (1 tical is 0.576 ounces).
In the year about to close, the price of gold in Myanmar seesawed from a low of K494,000 per tical on March 11 to that dizzying K623,000 on December 3. By contrast, prices in 2008 remained in the more sedate range of K519,000 (November 19) to K603,000 (July 16). As of December 18 this year, the price had declined slightly, following world trends, to K596,000 per tical.
The equivalence between the price of gold in Myanmar and in the rest of the world helps ensure that gold neither leaves or enters the country in any significant quantity.
Many things drove this year’s volatility, say experienced traders. Against the background of world fluctuations, local rumours of impending political or financial changes might impel investors to take refuge in the precious metal. But the volatility brought with it loss as well as profit, for some.
Despite price surges, trading volume has been low. Even peak trading season, after Thadingyut and the Islamic festivals, saw a 20 percent reduction in volume this year compared with last, said U Zaw Aung of Teit Sein goldsmith said.
This was also the year that the Yangon Division Gold Entrepreneurs’ Association (YDGEA), formed on December 17, 2008 by an alliance of government and gold traders, held its first full-year annual meeting on December 19, 2009.
Most of the country’s gold trading takes place in Yangon. Mandalay Division, which produces gold, trades it mostly in Yangon, or sometimes in Taunggyi, Shan State. From Yangon, the gold is distributed throughout the country. The carrying charge per tical from Mandalay to Yangon is K200-K500.
Traders are confident that gold will remain a good investment even if there is no sharp rise in the coming year, said U Aung, of Aung Thamardi gold shop.
“In 2010, as long as the government gives opportunities to gold entrepreneurs and controls monetary policy well, the gold business will continue to be positive,” said U Shwe Kyi, of Siam Jewellery.
