Cash-strapped Bangladeshis rush to sell gold valuables as pandemic roils economy

  • Abdur Rahim Harmachi, Chief Economics Correspondent, bdnews24.com
    Published: 2020-08-12 02:25:30 BdST

Sales have dropped almost to zero at the jewellery shops in Bangladesh as gold prices have skyrocketed shattering all records amid the coronavirus crisis, but the stores are still open mainly to buy gold ornaments.

Many families are selling their ornaments because the high prices have come as a lucrative offer along with the fact that the pandemic has caused devastating job losses and pushed income down.

Enamul Haque Khan, the president of Bangladesh Jewellers Samity or Bajus, described the picture as “unprecedented in the country’s history” as the pandemic put a halt on most marriages, the occasion on which the jewellers sell most gold.

“People don’t have money due to the pandemic. How will they buy ornaments? They are selling whatever gold they have to meet family needs,” said Enamul, owner of Sharmin Jewellers at Baitul Mukarram Jewellery Market.

A woman came to the market to sell 2 Bhori (1 Bhori = 11.664 grams) gold ornaments she had got during her marriage.

Her family is struggling to cope up with the crisis as the private firm where her husband works is not paying him regularly now.

“Coronavirus has turned everything upside down. Now the gold price is also high. So I’ve sold 2 Bhoris. The money will help get by while we get high price,” she said.

The picture is the same outside the capital.

“I badly need money. And the price is high. So I’ve sold it,” said a woman in Pabna’s Chatmohar after selling her 1 Bhori ornament.

Rony Roy, the owner of Roy Jewellers in Chatmohar, thinks people were selling gold ornaments mostly because of the high prices. “People think they won’t get this much price in future,” he said.

The precious yellow metal of the best quality, 22 carat, is now priced at an all-time high of Tk 77,216 per Bhori in Bangladesh.

For the traditional method, in which gold is acquired from old ornaments with no agreed standards of purity, the price has been fixed Tk 54,996 per Bhori.

Bajus President Enamul said like other countries the jewellers in Bangladesh buy gold from individuals at 20 percent less than the market rate.

PAWN BROKERING

Bajus General Secretary Dilip Kumar Agarwala, who owns Diamond World, said the store is pawn brokering instead of buying gold from individuals by taking advantage of the pandemic.

The store has also signed contracts with different banks to this end.

The people who are selling gold ornaments to the store will be able to get those back by repaying the money with an additional charge.

“We don’t want people to sell the things they hold dear, such as engagement ring,” said Agarwala.

The store is giving money to 100 to 150 people daily in exchange for gold ornaments, according to him.

“We’ve suffered massive losses in these five months of pandemic, but we don’t want to lose customers,” he added.

Agarwala also said Bajus hopes to lower the prices soon as the prices in the global market have begun to drop.