Market manipulators are attempting to artificially affect the price of pure gold. Trading with a market price of over K2.3 million per tical (0.578 ounce or 0.016 kilogramme) is unfounded in the market and it is just a rumour, said U Myo Myint, chair of the Yangon Region Gold Entrepreneurs Association (YGEA).
“There is no gold transaction with the price of K2.2-2.3 million per tical in the market. None of the gold retailers and shops dares to sell gold at that price. They just reply to it because of shortage of gold items,” U Myo Myint elaborated.
According to daily price data released by YGEA, global gold price stands at US$1,717 per ounce, while pure gold is set at K2,060,000 per tical.
The domestic gold price was valued at only K2,050,000 per tical when the global gold price hit over $1,800 per ounce. Therefore, the global gold price slump does not affect the domestic gold market owing to a surge in production cost and depreciation of the Kyat against the US dollar in the local forex market. A dollar is worth over K2,500 in the informal market.
“We do not set the gold price based on the exchange rate at K2,500-2,800 over-the-counter market. We calculate the prices with just over K2,000. This being so, YGEA’s set price is quite lower than the actual market price which is determined by the unofficial exchange rate of K2,500-2,800,” U Myo Myint stated.
Additionally, daily prices issued by YGEA are lower than the actual market price. Consequently, the cross-border illegal market has arisen again, he added.
The soaring safe-haven dollar value against the weakening Kyat in the domestic forex market halted pure gold bar transactions, U Myo Myint stressed.
During the end of September 2021, a dollar value hit an all-time high of over K3,000 in the gold exchanges and consequently, the pure gold reached a record high of K2.22 million per tical in history.
Under the guidance of the Central Committee on Ensuring Smooth Flow of Trade and Goods, the Monitoring and Steering Committee on Gold and Currency Market was formed on 17 December 2021 as gold and currency market stability play a crucial role in trade facilitation.
The objectives of the committee are inspecting and prosecuting market manipulation, checking if there is compliance with payment rules in the domestic market, and proceeding against those unscrupulous traders who intend to interfere with the free and fair operation in the market under the existing laws, by-laws and regulations in line with the official directives, illegal foreign currency holding, illegal trade and taking legal actions against price manipulators. — NN/GNLM