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Gold Prices Soar to Record Highs in Sri Lanka's Jewellery Retailers

Strategic Insights

— 1 min read

Gold prices have rallied in global markets, with the gain so far this year reaching an astonishing 39%. In Sri Lanka, the volatility of gold prices is affecting those who have borrowed by pawning 22-carat gold, with prices surging to record highs. At Colombo jewellery retailers, prices for 24-carat gold have reached Rs 300,000 per sovereign, with 22-carat gold priced between Rs 275,000 and Rs 280,000, and 18-carat gold at Rs 235,000. The prices reflect a surge in global markets, influenced by factors such as the US Federal Reserve Bank monetary policy, inflation data, tariff uncertainty, a relatively weaker US dollar, and geopolitics.

Key Takeaways:

  • The gold price has rallied in global markets, with a gain of 39% so far this year, reaching a new record high.
  • In Sri Lanka, 24-carat gold is priced at Rs 300,000 per sovereign, with 22-carat gold priced between Rs 275,000 and Rs 280,000, and 18-carat gold at Rs 235,000.
  • The prices reflect a surge in global markets, influenced by factors such as the US Federal Reserve Bank monetary policy, inflation data, tariff uncertainty, a relatively weaker US dollar, and geopolitics.
  • A Colombo jewellery retailer predicts higher prices for a sovereign, or 8 grams of gold, commonly called 'pawuma'.
  • The Colombo jewellery retailer quoted Rs 180,000 for three months, but the update came at the counter, reflecting gold price fluctuation.
  • For institutional investors, there are gold futures contracts or exchange-traded funds such as SPDR Gold Trust, which provide an investment return of 11% on average, even better than equities and bonds.

Statistics:

  • The gain in gold price so far this year is 39%.
  • The price of 24-carat gold in Sri Lanka is Rs 300,000 per sovereign.
  • The price of 22-carat gold in Sri Lanka is Rs 275,000 to Rs 280,000.
  • The price of 18-carat gold in Sri Lanka is Rs 235,000.
  • The investment return for gold futures contracts or exchange-traded funds is 11% on average.

Sources:

  • Sunday Times: March 2024
  • Comex: data show
  • World Gold Council: data
  • Cambridge Associates: analyst notes
  • Linklaters and Hilltop Walk Consulting: wholesale digital gold introduction
  • MSCI All Country World Index: data show
  • US Federal Reserve Bank: monetary policy
  • World Gold Council: data on global demand
  • Cambridge Associates: analyst notes on gold momentum

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