Chan Ny, 33, inspects a gold necklace for sale yesterday in Srah Chak commune, Phnom Penh. Photo by: Sovan Philongvia CAAI
Tuesday, 12 October 2010 15:00 Soeun Say
GOLD prices in Cambodia have followed a record-breaking surge on world markets, with gold climbing 4 percent over the past week.
According to Cambodia’s largest gold dealer, Ly Hour Exchange, based in Phnom Penh, gold was a record high of US$1,630 per damlung yesterday, up $60 from $1,570 a week earlier.
A damlung is the commonly used Cambodian measure for the precious metal, equal to 37.49 grams or about 1.2 troy ounces.
In London yesterday, gold for immediate delivery was at $1,349.21 a troy ounce at 10am, slightly below its October 7 record of $1,364.77 an ounce.
In Hong Kong yesterday, gold closed at US$1,348 to $1,349 an ounce, up from Friday's close of $1,334 to $1,335. While gold futures for December delivery jumped 0.3 percent to $1,349.10 an ounce on the Comex in New York.
“The gold prices are climbing in big steps everyday,” Ly Hour Exchange owner Sieng Lim said yesterday.
“The price in our country is dependent on the rise in gold prices on international markets,” she said, and added that it was very difficult to predict how local gold prices were likely to proceed in the coming weeks.
Despite the rises, sellers report that demand for the metal has stayed strong.
Long Touch, owner of the Long Touch Diamond and Gold Jewelry, a Phnom Penh-based gold dealer located close to O’Russey Market, said gold was very easy to sell.
“Khmer people living in the countryside like to save gold rather than money. So, when the gold price goes up they will benefit from it. But people living in city like to save diamonds rather than gold,” she said.
Most of the gold in Cambodia is imported from Hong Kong and Singapore. Global demand for gold, which is seen as a haven from weakening currencies, has helped boost the price to its record-breaking streak in recent weeks.
Speculation that governments would seek to boost their economies by further lowering currency values has also boosted demand for other commodities, subjecting the precious metal silver also to high demand.
Silver gained as much as 1.6 percent to $23.6325 an ounce in London yesterday, the highest price since March 1980.
Finance ministers and central bankers meeting over the past few days did little to show how they would alter differences over currencies. The dollar traded near an eight-month low against the euro on speculation that Federal Reserve policy makers would signal willingness to buy government debt to boost growth.
“Most countries want a weaker currency and their attempts to get there are good for all kinds of real assets including gold,” said Matthew Turner, an analyst at Mitsubishi Corp in London. “Just talk of currency wars is going to prompt people to diversify away from paper assets.”
ADDITIONAL REPORTING BLOOMBERG
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