Gold Loses Some Glitter, But Safe-Haven Appeal Endures

After a record-breaking rally that sent bullion soaring to unprecedented heights earlier this year, gold prices have retreated sharply last week on global profit-taking. Yet analysts believe the precious metal will remain one of the world's most sought-after safe-haven assets as geopolitical tensions, economic uncertainty and expectations of lower US interest rates continue to support demand.

The correction in international prices has already filtered through to Bangladesh, prompting the Bangladesh Jewellers Association (BAJUS) to slash domestic retail prices after a series of frequent revisions. 

From a peak above US$5,500 an ounce during the first quarter of 2026, global spot gold has fallen to around US$4,500 an ounce, as investors locked in profits following one of the strongest rallies in the metal's history. Despite the decline, prices remain well above historical averages, reflecting persistent concerns over global economic and political risks. In domestic market, BAJUS reduced the price of 22-carat gold to Tk 225,290 per bhori (11.664 grams), including VAT, effective from July 6. The latest rates also set 21-carat gold at Tk 215,142, 18-carat at Tk 184,757, and traditional gold at Tk 150,932 per bhori.

The adjustment follows a sharp cooling in international bullion prices, although Bangladesh's gold market continues to be influenced by movements in the US dollar, the availability of refined gold and domestic supply conditions. 

Market analysts say the spectacular rise in gold prices during the first half of the year was fuelled by escalating geopolitical conflicts, trade tensions among major economies, persistent inflation concerns and aggressive purchases by central banks seeking to diversify reserves away from the US dollar. At the same time, expectations that the US Federal Reserve may cut interest rates later this year have reinforced gold's attraction. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold, making the metal more appealing to both institutional and retail investors.

Although the recent sell-off has eased prices, economists believe the correction reflects healthy profit-taking rather than a reversal of the long-term upward trend. Continued geopolitical uncertainty, fragile global growth and strong central bank demand are expected to provide a solid floor under bullion prices.

For Bangladesh, where virtually all refined gold depends on imported or recycled supplies, global price swings are transmitted rapidly to the domestic market. BAJUS has revised gold prices dozens of times this year, underscoring the extraordinary volatility in international bullion markets. The sustained surge in gold prices has also reshaped consumer behaviour. Jewellery retailers report that many buyers are opting for lighter ornaments or lower-purity gold as soaring prices make traditional purchases increasingly unaffordable, particularly during the wedding season.

The impact extends beyond jewellery shops. Financial analysts note that rising gold prices often divert investment away from equities, as investors seeking safety shift funds from the stock market into precious metals. Such movements can reduce liquidity in the capital market, especially during periods of heightened global uncertainty.

Despite the latest price correction, analysts believe gold will continue to serve as a crucial hedge against inflation, currency depreciation and financial market volatility. Unless geopolitical tensions ease significantly and the global economic outlook improves, bullion is expected to retain its status as one of the world's preferred safe-haven assets.

For Bangladesh, the message is equally clear: while consumers may welcome lower jewellery prices, the country's gold market will remain highly exposed to developments far beyond its borders�"from monetary policy decisions in Washington to geopolitical flashpoints and shifts in global investor sentiment.