As prices soar, will Bangladesh’s love affair with gold go cold?
Unchecked inflation in the jewellery market risks deepening inequality — turning gold ownership into a privilege for the few rather than a cultural constant for all
Bangladesh's gold market has reached new heights. In October 2025, the price of 22-karat gold crossed Tk213,000 per bhori for the first time, after Bangladesh Jewellers Association (BAJUS) announced another hike.
Within a week, prices jumped by almost Tk5,000, marking the end of a year filled with nonstop increases. For many people, gold — once a symbol of tradition and aspiration — has now turned into a luxury they can no longer afford.
The latest surge reflects both global and local factors.
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Around the world, gold prices have been soaring. According to Reuters, spot prices stood at about $4,037.95 per ounce, driven by expectations of US interest rate cuts, geopolitical tensions, and heavy buying by central banks.
From the Russia–Ukraine war to the ongoing Israel–Gaza conflict, investors have rushed to gold as a safe haven. In times of uncertainty, gold keeps its appeal — it does not default or lose value.
"Gold saw a sharp increase in April this year when US President Donald Trump launched a trade war against much of the world, and it rallied again in August as the US president attacked the independence of the Federal Reserve," Al Jazeera reported, underscoring the deep connection between political turbulence and bullion strength.
"However, giving gold jewellery at weddings remains a deep-rooted custom. Families with weddings planned in the next two to three years — especially the more affluent ones — are now coming in to have ornaments made. That is why sales have actually increased."
The effects of global turmoil have rippled through Bangladesh's market with unusual strength. The country doesn't import much gold through official channels, but local prices still closely follow global trends.
The depreciation of taka has made matters worse. Since FY2021, the local currency has lost about 43% of its value against the US dollar, inflating costs for every gram of imported metal.
Most of the gold entering Bangladesh comes through international travellers under the National Board of Revenue's baggage rules. This system offers little protection from currency swings. So, when global gold prices rise, the weaker taka makes the increase even bigger at home.
However, not all of the blame lies abroad. Within Bangladesh, the gold market suffers from chronic structural weaknesses that have amplified volatility and fuelled price inflation.
Khandaker Golam Moazzem, Research Director at the Centre for Policy Dialogue (CPD), points to the country's largely informal supply system as a core problem.
"The biggest problem in the gold market in Bangladesh is the informal supply system of the precious metal," he said in a recent interview.
"The fluctuation of gold prices in the domestic market is not consistent with the global market. There is a lack of transparency in the process of determining the gold price. In the current context, the government must monitor the gold market to restore good governance in the sector. Everything necessary needs to be done to formalise the business," he added.
Indeed, the informal nature of the trade keeps both prices and practices opaque. Bangladesh's annual demand is estimated between 20 and 40 tonnes, but nearly 80% of this is met through unofficial or semi-legal channels. In FY2023–24 alone, around 45.6 tonnes of gold entered the country — still falling short of what consumers demanded, particularly during wedding seasons and festivals.
Market insiders allege that much of the imported gold is re-exported, often smuggled out to India, leaving local supply chronically tight. This scarcity fuels speculation and allows jewellers to raise prices far more aggressively than global trends might justify.
As domestic prices climbed past the Tk200,000 mark, consumer behaviour began to shift. Several jewellers noted that when gold prices start rising, many buyers rush to purchase ornaments out of fear that costs will rise even higher.
"When the price of gold starts to go up, some customers rush to jewellery stores, fearing that it may climb further," said one shop owner. "This trend continued even after prices crossed the Tk200,000 mark per bhori." Others observed a shift in buying habits, with many customers now preferring lighter ornaments. "As prices soar, people are opting for lighter jewellery instead of heavier pieces," explained another jeweller.
Anwar Hossain, a director of the Bangladesh Jewellers Association (BAJUS), shared a similar view with Prothom Alo. "Gold ornaments have become unaffordable for ordinary people due to the extreme price hike," he said. "However, giving gold jewellery at weddings remains a deep-rooted custom. Families with weddings planned in the next two to three years — especially the more affluent ones — are now coming in to have ornaments made. That is why sales have actually increased."
His comments reveal an unusual contradiction in the market: while affordability has collapsed for the middle class, demand among wealthier households — particularly those preparing for weddings — has remained strong, keeping retail activity surprisingly buoyant.
This duality underscores how cultural traditions continue to prop up demand despite economic headwinds. Weddings in Bangladesh are inseparable from gold — a bride's ornaments symbolise not only wealth but also familial honour and stability. As a result, many families stretch their finances to uphold these customs, even if it means purchasing fewer or lighter pieces.
Yet the imbalance between supply and demand shows no sign of easing. Global central banks have added fuel to the fire, collectively purchasing over 1,000 tonnes of gold each year since 2022. It is more than double the average annual volume between 2010 and 2021.
Poland, Turkey, India, Azerbaijan, and China were among the leading buyers last year, according to BBC. Their voracious appetite has tightened the global market, leaving less available for smaller importers like Bangladesh.
For policymakers in the country, this moment presents both an opportunity and a warning. The repeated price hikes reveal just how disconnected the domestic market has become from transparent mechanisms of global price transmission.
Formalising the supply chain could stabilise pricing, improve tax collection, and curb smuggling. At the same time, unchecked inflation in the jewellery market risks deepening inequality — turning gold ownership into a privilege for the few rather than a cultural constant for all.
