WHILE the dollar plumbed 10-year lows below K700 last week, gold was exploring new ground temporarily above K700,000 a tical, traders said. Both events were said to be related to the pronounced downturn in international stock markets a fortnight ago that has seen investors flock to the safety of gold and abandon the dollar. In Yangon on August 25, US$1 was buying only K685, while one Foreign Exchange Certicates (FEC) was valued at K610 and export credits – earned from the exports and valued at $1 each – were worth K720, down from K747, K680 and K765 respectively on August 17. “Nobody can trust the dollar and international experts are even saying that the trend is likely to be downward in coming years,” said a Ministry of Commerce official. However, he said investors had plenty of confidence in the value of gold. He said that another factor contributing to the dollar’s continuing fall was the flood of foreign currency earnings earned by the gem auctions held in March and July. On August 23, 24-carat gold was selling for K690,500 a tical (0.576 ounces), up from K670,000 on July 23, said an employee of Ye Lon gold shop at Yuzana Plaza. She added that demand was about the same as it was in July. The Ministry of Commerce official said international experts were predicting gold to hit $2000 an ounce, up from the $1900 recorded on August 23. He added that imports slowed in August, with only diesel and palm oil importers looking to buy export credits. A beans and pulses trader based in Hlaing Tharyar township said that whenever the dollar has dipped this year, the gold price has immediately shot up. He said exporters are suffering because they are unable to calculate the price they should set for exports at a time when the dollar – the currency used for nearly all transactions – is so volatile. “The local market depends on what happens internationally and there are always more lucrative investment options than gold but right now it looks like the safest choice in a difficult time,” said economist U Han Htun, a columnist for Commerce journal. He said the dollar had fallen by more than 10pc in value against the kyat but much less against regional currencies such as the Thai baht.

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