Gold price ticks up amid dollar, baht easing
The number of gold sellers is three times greater than the number of buyers at present as financial and economic fluctuations impact demand.
The ornamental gold price ticked up to 5.3 million kip per baht-weight (15 grammes) in Vientiane but the numbers of buyers is still less than sellers, Lao Gem and Jewelry Trader’s Association President, Mr Phouvong Phamisith, told Vientiane Times yesterday.
Ornamental gold prices dropped to about 4.55 million kip per baht in the middle of 2015 on global market lows.
While the peak price for ornamental gold was 7 million kip per baht in 2012, he said.
As foreign currencies and in particular the US dollar and the Thai baht decrease in value, gold prices in Laos tend to rise accordingly, he said.
In general, people in Laos have traditionally purchased gold as a savings measure or as collector’s items rather than for price speculation or profiteering.
Many people have used gold as a savings tool ready to liquidate at the necessary time to invest in large purchases or pay for significant household costs.
The living costs within the country are increasing while incomes of most employees are still limited compared to neighbouring countries and further afield.
Many Lao citizens are still hampered by low educational attainment and lack of skills when seeking job opportunities.
The jewellery industry helps to promote local artisanship and decorative designs and contributes to tourism promotion and job opportunities for people.
Laos has some gold deposits along with significant copper reserves and has welcomed large mining operations including the Phu Bia Mining Ltd, MMG LXML Sepon and Phonesack Group.
The price of ornamental gold produced from Lao ores remains high as it is produced for export and traded globally.
Meanwhile, private gold traders are primarily buying gold or copper products from overseas and from smaller gold mining operations in Laos.
Noting the weak link between ornamental gold products and mineral reserves in Laos, Mr Phouvong said entrepreneurs could help link the two to add value and contribute greatly to the nation’s socio-economic development, recommending the government look into this issue,
He said China and India were big gold markets where most people like to buy for their collections. If the gold price in these countries fluctuates it will also impact the Lao market.
This upward adjustment in the price of the precious metal also comes alongside a weaker US dollar.