All that glitters …..

A popular saying says - All that glitters is not gold but it is undeniable that gold always glitters. William Shakespeare has written--

All that glisters is not gold—

Often have you heard that told.

Many a man his life hath sold

But my outside to behold.

Gilded tombs do worms enfold.

Had you been as wise as bold,

Young in limbs, in judgment old,

Your answer had not been inscrolled

Fare you well. Your suit is cold—

(Merchant of Venice, Act II Scene VII)

Gold glitters not only in colour, also in price but what is gold? Scientifically, gold is a chemical element Gold with the symbol Au (from Latin: aurum) and atomic number 79. It is a bright, slightly orange-yellow, dense, soft, malleable and ductile metal in a pure form. It is extracted from mine.

There are other extremely costly metals like antimatter, californium, diamond, tritium, radium etc. but commonly gold is the most popular and attractive metal. Wedding or birthday, marriage anniversary or any good deed in house, people of this sub-continent always think of gold as a gift item but now common people are afraid of price of gold. Glittering gold now bites like chilling cold.

As a resource of investment gold is considered reliable but its price is gradually rising in world market. Income of people and normal investment have declined during pandemic. At this time there has been uncertainty about investing in stock market. That is why people’s interest in investing in gold has increased. Gold is known as safe heaven which means that it can be invested without the risk of big loss.

Buying gold or investing in gold is considered as profitable and popular investment in Bangladesh. The world's richest and most successful investors may not speak of gold as an ideal investment. But even then, over the centuries, millions of people have invested in gold, considering it safe. Saima Haque Bidisha, a professor of economics of Dhaka University, says that investing in gold is very popular among common people in Bangladesh, both as jewellery and gold bar. She said, "The main reason for this is that people's confidence in capital market is very low due to its uncertainty in Bangladesh. That is why ordinary people prefer investing in gold. There is another major reason for ordinary investors behind attraction towards gold. People of low-income group think that if price of gold goes up or down, there is no big difference. As a result, it is risk-free." (BBC News, 06-01-2021)

In the realm of gold 24 karat gold is pure gold and ranks first but no ornament can be produced with it. For making ornament alloy is to be mixed with it. Now-a-days it is more or less known to all that gold mainly has three categories – 22, 21 and 18 karat depending on the percentage of gold and alloy as below:

Beyond this there are other low quality gold depending on the percentage of alloy.

Gold price is fixed by Bangladesh Jeweller’s Association depending on price of raw gold in local and international market. Due to price-hike of raw gold price of gold of all categories has increased. From January, 2021 gold price in Bangladesh has been changed more than 15 times. On January 7, 2023 prices of best quality gold (22 karat) per bhori (11.664 grams) in Bangladesh was refixed at Tk. 93,429/-, 21 karat Tk. 89,171.-, 18 karat Tk.76,458- and 63,685/- for traditional system which are the record-highest in the history of Bangladesh. Bangladesh Jewellers Samity (BAJUS) has decided to reduce the price of gold by 1.26 per cent or Tk 1166 per bhori on Sunday in line with a fall in the price of the precious metal in the local bullion market. Earlier on February 4, the price of gold reduced by 1.24 per cent, or Tk 1,166 per bhori.

From now on, the price of one bhori of 22-carat gold (11.664g) will be Tk 91,095, down from Tk 92,263. The price of one bhori of 21-carat gold will be Tk 87,013, down from Tk 88,063 per bhori, and one bhori of 18-carat gold price will be Tk 74,591, down from Tk 75,461 per bhori.

Less experienced investors think that there is no need to watch the fluctuating rate of profit like capital market or savings certificates when investing in gold. Apart from that gold has a practical utility when needed. This is another reason why investment in gold is so popular. Also, whatever be the situation in international market, demand for gold always remains. Jeweller’s Association thinks that investing in gold is always profitable and safe. In this case, investing in gold bar is more profitable than gold jewellery. The reason is that 20 per cent of the price is deducted for selling gold jewellery and 10 per cent per cent is deducted for exchange but that won't happen in the case at gold bar. Moreover, gold bars can be traded at international market price. Gold bars are not usually available in jewellry shops. There are 19 legal gold importers licensed by the central bank in Bangladesh from whom gold bars can be purchased (BBC News, 6th January, 2021).

At the time of partition of India in 1947 price of gold was 88 rupees per 10 grams. In 1959 it reached 100/- mark for the first time. Exactly 15 years later, in 1974, it was 500 rupees. Sellers and buyers are often worried as price of gold fluctuates in domestic along with international market. In 1970 price of gold was Tk. 164/- per bhori. Reviewing market it has been found that gold price has reduced rarely whereas it has increased frequently.

It is known that market price of gold has not decreased even during Corona period, rather it has increased. Investors have been looking at gold as a safe investment from the beginning of last year due to lockdown of coronavirus infection, tensions between the United States and China, instability in global stock markets, political uncertainty in the Middle East and the weakening dollar. As a result demand for gold increased tremendously. Experts say that as price of gold increases in world market, traders also raise the price of gold in domestic market. Gold price has risen 52,000 per cent from 1947.

At present gold price has exceeded the purchasing power of middle-class people and persons having limited income. Other than shedding sighs looking at the dazzling ornaments in the open caskets of jewellery shops they have hardly any way to be bold to buy gold. For them glittering gold has now become a matter of shivering cold.

The writer is a former Commissioner of Taxes. He can be contacted at chinmayprasunbiswas@yahoo.com