Gold prices climbed to a three-month high this week on the back of speculation that the US dollar will continue to weaken, analysts and investors said Tuesday.
On Tuesday, gold traded for $892 per ounce in Phnom Penh up from $785 in mid-May, said Seang Lim, a gold trader at Ly Hour Jewelry and Exchange Co Ltd.
“We are noticing that the price of commodities like gold and oil have continued to rise since May,” said Mrs Lim, adding that the principal reason people are investing in gold is that the US dollar is dropping in value against the euro and the Japanese yen.
In Cambodia, most gold traders take their prices from the stock markets in Hong Kong and Singapore, where, as in Europe and the US, gold is measured in ounces.
Traders are experiencing a gradual rise in gold prices across the world. On Monday, gold sold for deliveries in August on the New York Mercantile Exchange hit a 14-week high, reaching $990 an ounce, before falling to $977.60.
“The devaluation of the US dollar provides a natural edge against commodities,” said Scott Lewis, a managing partner at Leopard Capital, a private equity fund with offices in Cambodia. Mr Lewis added that the high risk of inflation in Cambodia on the back of a weak dollar was another reason people were looking to gold as an alternative.
Chan Sophal, president of the Cambodia Economic Association, agrees. He said that the depreciation of the dollar meant that investors’ asset value in areas such as property and government bonds had grown smaller, persuading them to have more confidence in the safety of gold.