Gold prices in Cambodia are down about 27 per cent from January through June, according to the Ministry of Commerce.
Supply is stable and demand is gradually increasing, but prices fell on the heels of global market declines.
Figures from the ministry show that the price dropped from about $1,995 per damlung in January to $1,560 yesterday. One damlung is equal to 1.2 ounces, and 26.67 damlung are equal to 1 kilogram gram of gold.
Sieng Lim, a staffer at Ly Hour Money gold shop, a major seller in Phnom Penh, said yesterday that demand and gold trading in Phnom Penh is gradually increasing. She added that most Cambodians buy gold for personal use, to produce bracelets or earrings, while a minority stock up on it to resell.
“The current price is decreasing noticeably, with the lowest rate ever during the past three years,” Lim said. “There is nothing to worry about on the demand or supply side in the local market, but the price drop has to do with the international market.”
Chan Sophal, an independent economic analyst, said that as the global economy is recovers, people place more trust in the reliability of currencies, instead of hedging by hoarding gold.
“Price of gold has jumped significantly after the post-financial crisis because people think that the US currency has fluctuated quickly,” Sophal said. “Now, they think it is stable … which eventually makes the price decline.”
Gold trade changed little yesterday after the biggest drop in almost two weeks in response to the US Federal Reserve Chairman Ben S Bernanke’s comments on the central bank’s asset purchases. Spot gold traded at $1,276.54 an ounce by 9:28am in Singapore from $1,276.11 on Wednesday, when prices retreated 1.3 per cent, the most since July 5.
ADDITIONAL REPORTING BY BLOOMBERG