Gold emerged as a favored investment choice in 2024, driven by economic challenges, a depreciating taka, and declining interest rates on savings tools, according to jewellers.
Higher middle-class and middle-income earners increasingly turned to gold coins and small bars for financial security, while retail sales of gold ornaments fell by as much as 50% year-on-year, stated in a report.
Data from the Bangladesh Jeweller’s Association (Bajus) revealed that gold prices were adjusted 62 times in 2024, with 35 more upward adjustments than downward ones. The price of gold rose 24.53% year-on-year, reaching Tk 138,288 per bhori (11.664 grams) by the end of the year. At its peak in October, the price hit Tk 143,000 per bhori.
Historically, during economic uncertainty, inflation, or financial crises, people gravitate toward gold due to its resilience and liquidity. It allows investors to quickly convert holdings into cash.
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Since March 2023, inflation in Bangladesh has stayed persistently high, exceeding 9%. By November 2024, inflation reached 11.38%. In comparison, national savings certificates offer returns between 11.52% and 11.76%, barely outpacing inflation.
Gold, however, provided an alternative with the potential for higher gains. For example, a Tk 2 lakh investment in gold ornaments, coins, or bars could yield a profit of about Tk 10,000 per bhori within two or three weeks, according to Bajus data.
Despite the price surge, local jewellers reported a 40-50% drop in retail sales compared to the previous year. Reponul Hasan, owner of the Jewellery House in Old Dhaka, attributed the decline to frequent price fluctuations, which confused buyers and deterred purchases.
Bajus chairman and pricing committee head Rahman explained that domestic gold prices are aligned with international market trends. The decline in retail sales reflected the volatility and record-high prices.
Globally, 2024 marked a record-breaking year for gold, fueled by robust central bank purchases, geopolitical uncertainties, and monetary policy easing. These factors drove the metal’s strongest annual performance since 2010.
Bangladesh requires 20 to 40 tonnes of gold annually, according to government estimates. However, the commerce ministry reports that 80% of this demand is met through smuggling, with the remaining sourced from recycled gold. Industry insiders blame high import taxes for encouraging unauthorised channels, with Bajus estimating that gold worth Tk 73,000 crore is smuggled into the country each year.
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