July 20, 2011

Buyers going for gold


Cambodia's gold vendors say consumer interest in the precious metal has risen sharply, even as bullion prices have reached an all-time high in recent days.

Gold prices have soared 26.2 per cent in the past 12 months, according to the Ministry of Commerce’s Trade Promotion Department, as the precious metal hits record highs around the world.

Gold traded at US$1,588.88 a troy ounce in Cambodia yesterday, from $1,253.13 on the same date last year, ministry statistics show.

Worldwide, prices for the metal have climbed above $1,600 an ounce this week for the first time.

Yesterday, gold was headed for an 11th straight increase on the LSX, the longest such streak since at least 1975.

Darren Ly, head of bullion operations at Cambodia’s largest gold dealer, Ly Hour Exchange,  said international events were causing the steady increase.

“A lack of trust between countries and investors, the recent problems with Greece and Italy and the drop in the euro have all affected investors globally and nationally,” Ly said.

Even with intervention from International Monetary Fund and the European Central Bank, it could take many years for stability to return to the global financial market, he said.

Although Cambodia’s prices are slightly lower than global rates per ounce, Phnom Penh gold traders believe the Kingdom’s record prices have increased sales of the valued commodity to individuals, who see it as a safe way to save money.

Gold vendors located near Phnom Penh’s Central Market said customers also viewed  gold as a smart investment.

“While around three to four consumers still buy gold here each day, the number of customers selling gold to us has practically doubled in the past year,” International Pawn Business Buy and Sell employee
Por Mary said.

She said further rises were inevitable, boosting the wealth of Cambodians who denominated their savings in gold.

“Many Cambodians still feel safer having their savings in gold, and many people from rural areas come to Phnom Penh to purchase it.”

However, Cambodian consumers’ increased confidence in currency and banks in general was supplanting gold as the preferred method of saving, experts said.

“The country’s growing number of legitimate international banks, and the nascent economy, have restored people’s faith in currency. They tend to keep savings in the bank now,” Ly said.

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