Industry people attribute the price-hike mainly to rising international prices coupled with the rising domestic demand. A bhori (11.66 gram) of 21-carat gold now sells at Tk 9,500 which was Tk 9,300 only two weeks ago. The price of 22-carat gold is now Tk 9,800 a bhori against Tk 9,600 two weeks ago.

The price of Guinea or 21-carat gold was only Tk 6,700 and the price of 22-carat Tk 7,000 per bhori in January 2002.

In early 2003, the price crossed Tk 8,000 and in 2003 it surpassed Tk 9,000 mark. "The trend shows that the price is increasing almost by Tk 1,000 each year. And if such trend continues it may break all records hitting Tk 10,000 within few months," said Anwar Hossain, president of Bangladesh Jewellers Manufacturers and Exporters Association.

He said international price hike and growing local demand are major reasons for the rise in gold prices. The price was only $230 per ounce (2 bhori and 10.5 ana) in early 2001 but after the September 11 attack on the US it started rising. In April 2002, the price moved to $ 312 in international market. The price now hovers between $440 and $410.

The market has also been witnessing gold crisis since the 9/11 incident as many countries especially Gulf states have resorted to gold reserves instead of US dollars, he said.

"Besides, after floating of currency and strict Bangladesh Bank rules in foreign currency dealing dollar has become scarce in kerb market, resulting in high dependency on gold as a mode of informal trade payment," Hossain, also proprietor of General Jewellers, said.

Sources said Bangladesh has about $2 billion informal trade with India alone and most of the payments are now being made through gold instead of US dollars due to scarcity of dollar in kerb market. Fluctuation of dollar value also affects gold price in local market.

Talking to The Daily Star Sanjib Das, assistant sales in-charge of Goldsmith Bangladesh Ltd, a leading jewellery shop, said the rising price cannot dampen demand. "We are seeing good business despite increase in gold price," he said, adding that the price may cross Tk 10,000 mark early next year.

Sources said although government allows each passenger to bring 10kg gold from foreign visit paying Tk 1.07 lakh duty but 'harassment' by customs officials discourages people to import gold through legal channel.

The country has about 5,000 jewellery shops, which sell readymade ornaments and about 10,000 shops that make ornaments as per customers' choice. The country annual demand for gold is about 40 tonnes for ornaments.