Laotians sell jewellery to take profit as gold prices surge

(Vientiane Times) – Many people in Laos are taking advantage of the current rise in gold prices to sell gold jewellery for profit, President of the Lao Gem and Jewellery Traders’ Association, Mr Phouvong Phamisith, told Vientiane Times on Wednesday.

The number of customers buying gold jewellery in Laos has declined, after prices of the commodity on the global market increase due to the impact of the Covid-19 pandemic, he added.

Gold jewellery prices in Laos on Wednesday hit 8.8 million kip per baht-weight (15 grams) and 2.2 million kip a sleung (3.75 grams), up from 8.2 million kip per baht and around 2 million kip a sleung at the end of June.

The heavy impact of Covid-19 has resulted in the American leadership deciding to print more dollar currency as part of the measures to control the impact of the pandemic and to support economic stability, said Mr Phouvong, the owner of major trader Phouvong Jewellery Shop in Vientiane.

Gold is considered an enduring asset while money is not, and developing countries may store gold products when currencies are weak. This is a major reason for the rise in gold prices.

However, the gold trader is unable to predict the future direction of international gold prices as most gold items are imported, but he said if Covid-19 continues to spread globally for a long time, the prices would increase further.

He also noted that the current prices of gold jewellery in Laos have hit record high.

The price of gold in Laos, especially for ornaments, peaked at about 7 million kip per baht-weight in 2012, but dropped to 4.55 million kip in mid-2015. The spread of Covid-19 saw the price of the commodity rising recently.

During normal times, the price of gold items rises at the end of Buddhist Lent and drops at the start of Lent. For the rest of the year when more weddings take place, many people buy gold to use as dowry.

China is a major market for gold and if the prices in China fluctuates, there is an impact on the Lao market.

The gold prices are also affected when the US dollar and the Thai baht are weak or at their peak, Mr Phouvong said.