Industry people attribute the price hike mainly to international price rise coupled with the rising domestic demand.

They also said after the September 11 attack on Twin Tower followed by the Iraq war, people are cashing their investments and buying gold.

The price of a bhori of 22-carat gold is now Tk 10,000 against Tk 9,800 one month ago. The price of 21-carat gold was Tk 9,700 per bhori yesterday which was Tk 9,500 only one month ago.

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

In early 2003, the price crossed Tk 8,000 and at the year-end it surpassed Tk 9,000-mark, industry sources said.

"International price hike and growing local demand are major reasons for continued rise in gold prices," Anwar Hossain, president of Bangladesh Jewellers Manufacturers and Exporters Association, told the Daily Star yesterday.

The price hiking trend of gold shows that the price is increasing almost by Tk 1,000 every year. "If the price of gold in the international market increases further, the price of gold in the domestic market will cross Tk 10,000 mark," Anwar said.

The gold price was only $230 per ounce (2 bhori and 10.5 ana) in early 2001 but just after the September 11 attack on the US it started rising. In April 2002, the price soared to $312 in the international market.

"The price now hovers between $420 and $425 in the international market," Anwar, also proprietor of General Jewellers, said.

After float 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, he added.

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 the kerb market.