Soaring Gold Prices Sting Local Jewelers
Jewelers complained Wednesday that gold prices driven up by the recent US financial crisis were causing a drop in sales. (01 October 20
Jewelers and gold shop owners in Phnom Penh say business has dropped in recent days, thanks to a rise in gold prices spurred by uncertainty in global financial markets. Local gold prices were trading at $1,070 per damlung, or$810.70 per ounce, on Wednesday, up from $1,040 per damlung last month, part of an upward swing fueled by the USfinancial crisis and uncertainty in other markets. Many Cambodians own gold, a throwback to the times ofturbulent currencies, when under the successive regimes since the 1950s, monies were all different—or, in the case of the Khmer Rouge, abolished altogether. But Phnom Penhsellers said the higher prices of gold are curtailing the Cambodian habit. Theperiod following Cambodia'sJuly elections has been economically slow overall, and, hit by inflation andthe high price of fuel, less people have money to spend. "We've met difficulties getting income from the goldbusiness, because the price of gold has risen to a high price in recent days,"Ly Hour, who owns Ly Hour Jewelry and Exchange Co., Ltd., said. "The peoplehave no money to buy it." Chan Sophal, president of the Cambodian EconomicAssociation, said the high price of gold in Phnom Penhwas due to the USeconomic crisis and the weakened US dollar. "The high price of gold for Cambodia is a good thing, becausethe majority of the people like to save gold," he said. "It decreases theincome of gold sellers, but it is not a necessary thing for investment orbusiness in Cambodia." Oa Sophy, owner of Orsovann Jewelry Shop, said gold has beensteadily rising in price, but his profits have been hit hard all year. "I have been unsatisfied with the income of my gold businessthis year," he said. "Compared to 2006 and 2007, I've lost some 50 percent ofmy income from gold, because in 2005, 2006 and 2007, we sold one kilogram ofgold a month. But right now, we only sell out only 300 grams of gold a month." Jewelry shop owner Long Ly said a dip ingold sales was no need for concern. "The high price of gold has not completely affected my goldbusiness," he said. "If my income drops down, I must take care of my businessto make it rise up."