GOLD has always captured human imagination. For centuries, it has been valued as a symbol of wealth, a store of value and a safeguard in uncertain times. From the days of ancient kingdoms to today鈥檚 modern economies, gold has been the metal people turn to when currencies fall or empires collapse. In 2025, this old story has come alive again. The world is witnessing one of the significant rises in gold prices in history, and Bangladesh, like many other countries, is feeling the heat.
In the global market, the price of gold recently crossed $3,800 per ounce, the highest ever recorded (Reuters, 2025). In local terms, this means buyers in Dhaka now face rates of nearly Tk 195,000 per bhori (about 11.664 grams) for 22-carat hallmarked gold. Per-gram prices have cross above Tk 13,700 for 22-carat and almost Tk 15,000 for 24-carat (Gold Price Data, 2025). For normal families, these numbers are shocking. For jewellers, it is a challenge. And for small investors, it is a moment of both hope and fear.
Why is this happening? The answer lies in a combination of economic, political and financial forces that stretch far beyond Bangladesh鈥檚 borders.
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The dollar and power of interest rates
THE first and perhaps most important reason for the surge is the weakness of the US dollar. Since gold is priced internationally in dollars, any change in the value of the dollar directly affects the price of gold. When the dollar weakens, buyers using other currencies find gold cheaper, and demand goes up.
Lately, the dollar has been under pressure due to concerns over the US government鈥檚 large debt burden and political disputes about budget management. Investors worry about America鈥檚 long-term fiscal stability. At the same time, the US Federal Reserve has hinted at possible interest rate cuts. This is important: when interest rates fall, bonds and savings accounts provide lower returns. Investors then look for other safe places to park their money. Gold, which does not pay interest but maintains value, becomes an attractive alternative.
This mechanism has been repeated throughout history. In times of low interest rates, gold tends to perform strongly. The logic is simple: if your bank deposit earns less, you would rather keep gold that holds its value against inflation and currency risk.
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Global uncertainty and 鈥榝ear premium鈥�
GOLD is often called the 鈥榝ear asset.鈥� Its value rises when people lose confidence in financial markets or governments. Right now, the global environment is full of uncertainty. Wars in different parts of the world, strained trade relations between major economies, and debates about the future of globalisation are weighing on investor confidence.
A study by American economists highlighted that policy uncertainty alone explained almost half of the rise in gold prices during one recent period (Econofact, 2024). This means that even if inflation or production costs remain stable, the mere fear of political or economic shocks can drive people towards gold. In this sense, gold is not just a commodity but also a reflection of human psychology.
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BRICS and the move away from the dollar
ANOTHER layer to this story comes from geopolitics. The BRICS alliance Brazil, Russia, India, China, South Africa, along with new members has been working to reduce dependence on the US dollar in trade and finance. This strategy, often called de-dollarization, aims to weaken the dominance of the dollar in global markets.
One tool in this shift is gold. By increasing their gold reserves, central banks in these countries strengthen their financial independence. In 2023 and 2024, central banks purchased more gold than in any year since the 1970s, with China and Russia leading the push (World Gold Council, 2025). For them, gold is not just a hedge against uncertainty but also a political weapon, an asset that cannot be frozen or sanctioned like dollars in Western banks.
This wave of central bank buying keeps the gold market up, regardless of consumer demand in jewellery or small investments. It means that prices are supported by governments with deep pockets, making corrections slower and less predictable.
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Speculative trading and market momentum
WHILE central banks and cautious investors buy gold for safety, another group enters the market for profit: speculative traders. These are hedge funds, large financial institutions and individual traders who buy and sell gold contracts based on their expectations of future prices.
When speculation grows, it creates momentum. Traders bet that prices will rise, so they buy heavily. This very act of buying pushes the price up, making their bet come true in the short run. Such speculative flows often exaggerate price movements, leading to sharp spikes even when physical demand for jewellery or bars does not rise as much.
This is why some analysts describe recent gold movements as a 鈥榝inancial rush.鈥� It is not pure gambling because trades are based on market analysis and signals but it is certainly more aggressive than cautious long-term investment. For general people in Bangladesh, this speculative activity far away in New York or Shanghai still matters, because it influences the prices displayed in Dhaka鈥檚 jewellery shops.
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Bangladesh鈥檚 local struggles
FOR Bangladesh, the global storm in gold markets is being felt directly. Since the country imports gold, it is highly sensitive to global price movements. On top of that, the taka has weakened against the dollar in recent years, making imports even more expensive. This double effect of global price hikes and local currency depreciation pushes prices to record levels in the domestic market.
Families preparing for weddings, festivals or other social events are the hardest hit. In a culture where gold jewellery is a traditional gift, rising prices mean either buying less or spending much more. For middle-income households, this is a significant financial burden.
Small investors also face a dilemma. Some see gold as a shield against inflation and instability, but they worry about buying at the top. If global conditions change and prices fall, new buyers could lose value quickly. Moreover, gold in Bangladesh is not just the raw metal price: buyers must pay 5 per cent VAT and 鈥榤aking charges鈥� at jewellery shops, which adds thousands of taka on top of the global rate.
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What should people do?
EXPERTS give mixed advice, but a few common points stand out. For those who already own gold, holding on may be wise for now. The factors driving the rise such as weak dollar, uncertainty, BRICS buying are not going away quickly. But caution is still needed: prices driven by speculation can fall suddenly if global confidence improves.
For potential buyers, the advice is to move carefully. Instead of making a large purchase at once, it may be safer to buy in small amounts over time, averaging out the cost. For non-essential jewellery, delaying purchases until the market stabilises could save money. Most importantly, financial planners warn against putting all savings into gold. It should be one part of a diversified plan that includes cash, deposits, property or other investments.
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The bigger picture
THE rise in gold prices tells a story larger than jewellery or savings. It reflects the state of the world economy. A weaker dollar shows cracks in America鈥檚 financial power. Central bank buying reveals a shift in global influence, especially from BRICS countries. Speculative trading shows how financial markets can magnify real-world trends. And the struggles of ordinary families in Bangladesh show how global forces determine daily life in unexpected ways.
Gold shines brightest in times of doubt, but its glow carries a warning. It reminds us that financial systems are fragile, currencies can fall and politics can shape markets as much as economics. For Bangladesh, the lesson is not just about adjusting wedding budgets or delaying jewellery purchases. It is about understanding how connected the country is to global trends and how even a simple ornament carries within it the weight of international power and uncertainty.
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Mostafizur Rahman is a research officer in the Department of Economics,听North South University.
