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 US
financial crisis and uncertainty in other markets.
Many Cambodians own gold, a throwback to the times of
turbulent 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 Penh
sellers said the higher prices of gold are curtailing the Cambodian habit. The
period following Cambodia's
July elections has been economically slow overall, and, hit by inflation and
the high price of fuel, less people have money to spend.
"We've met difficulties getting income from the gold
business, 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 people
have no money to buy it."
Chan Sophal, president of the Cambodian Economic
Association, said the high price of gold in Phnom Penh
was due to the US
economic crisis and the weakened US dollar.
"The high price of gold for Cambodia is a good thing, because
the majority of the people like to save gold," he said. "It decreases the
income of gold sellers, but it is not a necessary thing for investment or
business in Cambodia."
Oa Sophy, owner of Orsovann Jewelry Shop, said gold has been
steadily rising in price, but his profits have been hit hard all year.
"I have been unsatisfied with the income of my gold business
this year," he said. "Compared to 2006 and 2007, I've lost some 50 percent of
my income from gold, because in 2005, 2006 and 2007, we sold one kilogram of
gold a month. But right now, we only sell out only 300 grams of gold a month."
Jewelry shop owner Long Ly said a dip in
gold sales was no need for concern.
"The high price of gold has not completely affected my gold
business," he said. "If my income drops down, I must take care of my business
to make it rise up."