Cambodians have long had a habit of buying and stocking gold, especially as jewelry, but that habit may be changing, thanks to gold’s continual rise in value.
“No one wants to buy gold now,” said Chea Ly, a Phnom Penh resident living near Deum Kor market who has stopped stocking jewelry herself. “We would rather sell it instead, or keep the money to buy something else.”
That’s because the common trading price of gold has climbed from around $700 an ounce in 2007 to more than $1,200 an ounce this week. Investors have been flocking to gold in recent years as a hedge against uncertainty in money and other markets.
That has put a freeze on gold purchases, which Cambodians have become accustomed to after decades of currency instability, including the complete abolishment of money and banks under the Khmer Rouge.
In that way, gold acts as a savings mechanism for many, who tend to spend currency and keep gold.
“At these skyrocketing prices, there are more sellers than buyers,” said Ly Hour, owner of Ly Hour Jewelry and Exchange, a local gold and money trader. “When customers come, they say the price of gold is still high, so they would wait to buy it until the price gets lower.”
There are also signs that people here think the price will continual to rise.
Not many people are buying gold these days, said Neang Chan Nuon, who runs a gold shop near O’Russei market. But they aren’t selling it either.
“Some who bought their gold at a much lower price still keep the old precious metal in hope that the price of gold will probably get higher,” she said in an interview at her shop.
Chan Sophal, president of the Cambodian Economic Association, said no matter how high the price of gold is, Cambodians will likely continue the habit of hording it at home, because metals can come in handy under any government.
“Gold is the most trusted currency for Cambodians at all times, so it is unlikely that they may stop buying and stocking the precious metal,” he said.