The spot gold price gained at US$1,961 per ounce, prompting the Yangon Region Gold Entrepreneurs Association (YGEA) to hike the reference price to K2,310,000 per tical (0.578 ounce or 0.016 kilogramme) on 18 July 2023.
When the spot gold price climbed to $2,040 per ounce, the YGEA raised the reference rate to above K2.4 million per tical in early May 2023.
Meanwhile, pure gold hovered at approximately K3.24 million per tical in the unofficial market.
Consequently, there is a large price difference of over K930,000 per tical between the YGEA’s reference price and the price in the grey 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 over K3,100 in shady dealings.
The US dollar exchange rate weighs on domestic gold prices. Mandalay Gold Entrepreneurs Association (MGEA) sold over seven visses of pure gold at the special price within two weeks beginning 19 June to stabilize the gold price.
The MGEA commenced gold sell-off at K3,050,000 per tical at noon of 19 June and sold at K3,040,000 per tical on 20 June, K3,035,000 per tical on 21 and 22 June, K3,030,000 per tical on 23, 26, 27, 28 and 30 June and 3 July, K3 million per tical on 4,5,6 and 7 July respectively.
Myanmar’s gold price is highly correlated with the spot gold price and the US dollar exchange rate. The soaring dollar exchanging at over K4,500 pushed the gold price up to a record-high of K3.7 million per tical in late August 2022.
To lower the gold price, 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. — NN/EM