Gold Hitting Record Highs: What’s Driving the Surge in Bangladesh?

Gold hitting record highs in Bangladesh has become a familiar story lately. In September 2025 alone, the price of 22-carat gold jumped by over Tk 13,000 per bhori (11.664 grams), reaching Tk 189,306 on September 21. Even more recently, the price climbed further, crossing Tk 194,858 per bhori as reported by the Bangladesh Jewellers Association (Bajus).

Yet, while gold prices surge, consumer demand is faltering. Jewelry shops in Dhaka report that sales have fallen by up to 45 percent, showing how volatile the market has become. Below, we explore key reasons behind the surge, its effects on buyers and policy responses, and what could lie ahead.

Global Bullion Trends & Safe-Haven Demand

One of the strongest drivers behind gold hitting record highs is the global bullion market. International gold prices have been pushing upward, exerting pressure on domestic rates. Analysts point out that dovish signals from the U.S. Federal Reserve—especially potential interest rate cuts—are making gold a more attractive safe-haven asset. With central banks continuing to buy gold and inflation concerns still looming in many economies, demand has stayed firm.

As spot gold approaches historic peaks of more than $3,690 per ounce in international markets, the ripple effect quickly reaches Bangladesh. This connection ensures that local gold markets mirror international movements, making global investor sentiment a crucial factor in determining prices at home.

Currency Depreciation & Inflation Pressure

Another major reason for gold hitting record highs in Bangladesh is the sharp depreciation of the Bangladeshi taka. A U.S. dollar that once cost Tk 80–85 now trades at Tk 123–124, dramatically raising the local cost of imported commodities, including gold.

With the taka weakening, every dollar-denominated commodity automatically becomes more expensive in local terms. Combined with general inflationary pressures in the economy, this exchange rate slide has amplified the upward movement in gold prices, leaving consumers struggling to keep pace.

Supply Constraints, Smuggling & Limited Formal Imports

Despite high prices, gold hitting record highs in Bangladesh is not just a matter of soaring demand. Supply constraints play a huge role as well. The formal gold import channel remains restricted, with only a handful of licensed importers allowed under government policy. While 18 companies and one bank were granted licenses in 2018, many of these quotas remain underutilized.

Between 2020 and 2021, only 160 kilograms of gold were imported out of an approved 306.76 kilograms. Meanwhile, much larger amounts entered through baggage rules and informal channels—nearly 99,791 kilograms in 2021–22 alone. Some of this gold was re-exported, but the sheer volume shows how dependent Bangladesh is on unofficial supply.

In fiscal 2023–24, the country received around 45,600 kilograms of gold, which still falls short of the estimated annual demand of 20–40 tonnes. Roughly 80 percent of this demand is met via recycled or informal sources. Because formal imports are so limited, price margins widen, giving middlemen and traders room to push local prices far above international parity.

Consumer Behavior & Demand Patterns

Interestingly, as gold hitting record highs in Bangladesh, actual consumer demand has cooled significantly. Traders report up to a 45 percent drop in customer turnout during what should be a busy wedding and festive season. Many buyers have postponed purchases, waiting for prices to stabilize or fall before committing.

For many households, gold is not only an adornment but also a long-term investment. Rising prices discourage lower and middle-income buyers, leaving only wealthier consumers to continue transactions. This mismatch between affordability and necessity highlights how price surges distort normal buying behavior.

Effects on the Market & Economy

The surge in gold prices has far-reaching consequences across the economy. For one, affordability is eroding. Middle- and upper-middle-class buyers who once purchased gold jewelry regularly now see it as something reserved only for weddings or major family occasions. Gold has become less accessible to average consumers.

At the same time, demand volatility is disrupting the market. Sharp price fluctuations discourage steady buying and encourage speculative investment instead. For policymakers, this poses a dilemma: they must stabilize supply, discourage smuggling, and consider whether institutions like Bangladesh Bank should step in as importers.

Meanwhile, tight supply allows intermediaries to expand their margins, further inflating prices. This feedback loop creates a cycle where consumers lose purchasing power, but traders benefit from higher spreads, worsening the overall imbalance.

What Can the Government Do?

To control volatility and reduce the strain of gold hitting record highs, several measures have been suggested. One proposal is to allow Bangladesh Bank to import gold directly, which would help bridge the supply gap and stabilize domestic prices. Expanding the number of authorized importers and ensuring that licensed quotas are fully utilized could also improve availability.

At the same time, cracking down on smuggling and strengthening customs oversight would reduce leakage from official channels. Encouraging more transparency in recycled gold markets could also make supply chains more predictable and prices less vulnerable to manipulation.

Historical Perspective & Price Trajectory

The long-term story of gold hitting record highs in Bangladesh is striking. Back in 1971, during the country’s war of independence, a bhori of gold cost just Tk 170. Today, that price has multiplied more than a thousand times, highlighting both inflationary pressures and the evolving role of gold in the economy.

Over the past 25 years, price acceleration has been especially steep, fueled by currency depreciation and global market shocks. Gold’s rise in Bangladesh reflects not only international economic dynamics but also the country’s domestic vulnerabilities in currency stability and trade policy.

What to Watch Going Forward

As gold prices continue their climb, several factors will determine the future trajectory. The U.S. Federal Reserve’s interest rate policies remain critical, as lower rates make gold more attractive globally. The stability of the taka will also play a major role, as further depreciation could push prices even higher.

In addition, shifts in global central bank demand, government policy responses, and consumer confidence will influence the market. If buyers regain confidence, demand may recover despite high prices. But if uncertainty persists, the cycle of suppressed demand and inflated margins may continue.

For now, one thing is clear: gold hitting record highs in Bangladesh is both a symptom of global trends and a reflection of domestic challenges. Managing this balance will be vital for policymakers, traders, and consumers alike.