Source: Vientiane Times
The number of customers buying gold jewellery in Laos has declined after prices of the commodity on the global market increased further due to the impact of the Covid-19 pandemic.
Many consumers are taking advantage of the rise in prices to sell gold jewellery for profit, President of the Lao Gem and Jewellery Traders’ Association, Mr Phouvong Phamisith, told Vientiane Times on Wednesday.
Gold jewellery prices in Laos on Wednesday were almost 8.8 million kip per baht-weight (15 grams) and 2.2 million kip a sleung (3.75 grams), up from 8.2 million kip per baht and around 2 million kip a sleung at the end of June.
The heavy impact of Covid-19 around the world, especially in the US, has resulted in the American leadership deciding to print more dollar currency as part of measures to control the impact of the pandemic and to support economic stability, said Mr Phouvong, who is also the owner of Phouvong Jewellery Shop in Vientiane, one of the leading gold traders of Laos.
Increasing the printing of the dollar in the US would result in the value of currencies around the world dropping, and different large global gold markets have to store products for sale during the crisis, Mr Phouvong said.
Gold is considered an enduring asset while money is not, and developing countries may store gold products when currencies are weak. This issue is a major reason for the rise in gold prices at the global level, and particularly in Laos, he added.
However, he was unable to predict the future direction of gold prices as they usually depend on global market trends and most gold items are imported, but he said if Covid-19 continues to spread globally for a long time, the prices would increase further.
He also noted that the current prices of gold jewellery in Laos are the highest, when compare to the past.
The price of gold in Laos, especially for ornaments, peaked at about 7 million kip per baht-weight in 2012, but dropped to 4.55 million kip in mid-2015. The spread of Covid-19 saw the commodity rising recently.
Normally, the cost of gold items rises at the end of Buddhist Lent and drops again at the start of Lent.
During the rest of the year, when weddings take place, many people buy gold to use as dowry.
China is a major market for gold and if the prices in China move up or down, there is an impact on the Lao market. The gold prices are also affected when the US dollar and the Thai baht are weak or at their peak, Mr Phouvong said.